The cost of a transition to electric vehicles in Africa: A case study of Ghana

• Published in: Case studies on transport policy 2022-03, Vol.10 (1), p.388-395
• Main Authors: Ayetor, Godwin K., Opoku, Richard, Sekyere, Charles K.K., Agyei-Agyeman, Anthony, Deyegbe, Godwin R.
• Format: Article
• Language: English
• Subjects: Africa; Automotive; E-mobility; Electric vehicles; Energy mix; Ghana; Transportation
• ISSN: 2213-624X; 2213-6258
• DOI: 10.1016/j.cstp.2021.12.018

•An Electric Vehicle (EV) cost 30% less to own than a conventional vehicle in Ghana.•Indirect CO2 emissions of EVs are one third that of conventional vehicles in Ghana.•A 10% renewable energy (RE) addition to the grid reduces the TCO of the EV by 10%.•If the total RE source falls below 15%, the indirect EV emissions will be higher.•The biggest barrier to EV ownership in Ghana is initial price and taxes. This case study investigates the total cost of ownership (TCO) of four plug-in electric vehicles (PEV) compared with an internal combustion engine vehicle (ICEV) in Ghana over 20 years. The TCO model incorporated the manufacturer’s suggested retail price (MSRP), tax, fuel cost, charging cost, maintenance cost, social cost, and residual value including depreciation. A sensitivity analysis was used to determine the effect of the factors on TCO. Emissions of PEV were determined based on the emission factor of the energy mix. The results show that under the prevailing energy mix, the TCO of ICEV is higher than PEV by at least 30%. While the TCO of three of the PEV was consistently lower in each of the 20 years, but that of the Tesla Model 3 was not until the 12th year. High MSRP and tax regime were contributory factors. While the social cost of ICEV was found to be 164% higher, a renewable energy mix of below 20% was found to be detrimental to the environmental advantage of PEV in Ghana. For each ICEV replaced by an electric vehicle, one-third of emissions savings will be achieved under the prevailing energy mix. But at a renewable energy mix of 15% and below, PEV in Ghana will give more emissions than ICEV. Future expansion in the energy grid should focus on renewable energy. Import tax, if waived could reduce TCO by $0.12/mile. Consequently, the current tax regime on PEV in Ghana could be revised. It is also recommended that the price difference between electricity cost per kilowatt and fuel cost per gallon should always exceed $4 dollars to make PEV competitive.