Vancouver Ethiopian Blog

Ethiopian life in Vancouver, BC, Canada

Ethiopia Launches Electric Car

I read a good news this week that an Italian-Chinese business venture is opening a factory in Ethiopia to produce a practical and affordable electric car. Just last month, Rwanda launched its first bio-diesel bus.

Even though there is a power shortage, at the present time, in Ethiopia, especially in the capital city Addis Ababa, it looks like that this venture could be successful.

Ethiopia is only the second African country to launch an electric car, after South Africa.

Carlo Pironti, general manager of Free Style PLC, the company that will be producing the Solaris electric cars, said, ” Ethiopia’s current electricity shortages were not a major obstacle to operating an electric car”. He believes that in the future, “Ethiopia will have lots of power supply”. Free Style PLC has been doing business in Ethiopia for the past 15 years in the areas of renewable energy supplies, including solar and wind power.

For those who have concerns about Ethiopia’s power supply, Mr. Pironti said, “In any case, the car can be recharged by generator and by solar power.”

Photo: Solaris Elettra Electric Car in Addis Ababa

Why Ethiopia?

Mr Pironti, an Italian electrical engineer, sees a big switchover to electric vehicles within the next few years, both in Ethiopia and around the world.

Mr. Pironti has been traveling world wide for many years studying the automobile market. He has come to a conclusion that Ethiopia has a big potential for the electric car market. So, he wants take advantage of the market by launching his factory.

Even though, I have not seen the list of points why Pironti chose Ethiopia, in my opinion he might have considered the following points:

1/ Ethiopia has a population of 80 million people.

2/ Ethiopia still uses heavily polluting leaded gasoline – that is why Addis Ababa is so polluted.

3/ In the past 20 years, for some reason, the rich has gotten too affluent and the poor too destitute. In the process, the middle class income has also increased significantly. So, many have the money to buy a car.

4/ Ethiopia doesn’t have proven oil reserves. However, many companies are currently exploring mining opportunities in Ethiopia.

5/ Ethiopia has a potential abundance of electricity. Dams are being built.

6/ Cars are very expensive in Ethiopia due to import duties, which amounts to more than 100% of the purchase price of the car. For example: In January 2010, a 5 year old used 2005 Toyota Corolla was selling for a whopping $30,000 USD. Now used car values have gone down by 10 to 20%, but still, I believe, it is very expensive at this discounted price. Look at CraigsList for a 5 year old Toyota Corolla in North America and see how much it costs here.

7/ Used cars sell very fast – showing that there is a big demand and people are willing to pay a huge amount.

8/ The government incentive to start businesses in Ethiopia, including tax holidays for many years.

9/ Gas prices are too expensive. With government subsidies, Ethiopians pay the same amount for a litre of gas as people in Vancouver, Canada.

10/ Highly skilled workforce readily available in the country.

I am sure that there are other factors why Ethiopia was chosen.

Investment

  • Initial investment: USD $600,000
  • Investors: Carlo Pironti, Other Italians, and mostly Chinese people

Production Plan

The cars will be sold in Ethiopia and exported to other African countries and also to Europe. The company plans to manufacture only six cars a week for the first 3 months and then increase the production to 300 a month, when the plant is operating at full capacity.

The company plans to use a Korean-made body, and components from 57 different suppliers. The company has built its 15,000 Sq. meter facility in Legetafo area of Addis Ababa.

Long Term Plan

High car import duties coupled with low income levels in the country, many Ethiopians can’t afford to own a car. So, if the company sells even 1,000 cars a year, that could be seen as a huge success. However, to overcome this problem, Mr Pironti says his company will develop term financing system.

I believe that financing is a great way to entice people to own an electric car. In Ethiopia, most transactions are cash based. Credit cards and the like, very rampant in the west, are not known there. People even buy homes by paying cash, even if the price of a home is really expensive.

Car Details

The Solaris Elettra is a full meter shorter than gasoline powered cars because it does not need room for an internal combustion engine or a fuel tank.

The car could be driven 80 to 150 Km distance after an 8 hour charge

Mr. Pironti describes it well when he said, “The car always will be smaller without sacrificing so much space for the passenger.  Now you see this car, one meter is not necessary.  It was the place of the motor which is not.  There are two batteries.  But we can put [them] in another place and make the car one meter shorter without compromising the safety of the vehicle”.

Pricing

The car is priced at $12,000 to $15,000 USD, a charging unit for five vehicles costs an additional $40,000. That works out to be $8,000 USD per vehicle.

Conclusion

Some doubt if Ethiopia and/or all Africa, where erratic power supplies, low levels of personal wealth and poor infrastructure are common, is ready for electric cars or not. However, Ethiopia is currently building a huge hydro-electric dam on the Omo river and hopes to become a major exporter of energy when that is completed.

Adopting electric cars not only reduces imported oil dependency, but also reduces the pollution that Ethiopia is suffering from currently. The carbon footprint of an electric car is negligible. The average car costs more than $1 in gasoline to drive an average car 10 kilometers, however, the cost of charging an electric car to go the same distance is less than 2 cents.

International auto companies have been focusing on electric cars for the past decade. Fuel cell cars like the ones made by Vancouver’s Ballard Power Systems are no longer the viable options. Fiat is opening one electric plant in Sicily. Mitsubishi and Chrysler are set to start manufacturing electric cars. I think the future of electric cars is bright because of projected increase in gas prices, environmentally conscious consumers, and government regulations.

One area of concern, especially for Ethiopia, is the lack of recharging points for longer journeys. Drivers will be confined with in the city when using electric cars. It is clear that most of the people of Ethiopia can’t afford to buy a car. But, judging from the demand of cars in the country, it looks like that the electric car might be very successful venture in Ethiopia.

An electric car factory can be run by two or three dozens of people if the right skill sets have been put together. So it’s a small scale industry, very affordable by a small group of investors.

My best wishes go to the investors, who believed in Ethiopia. Thank you for opening employment opportunities for many Ethiopians. I hope that I will be able to see many more factories in many parts of Ethiopia in the coming years.

Check out the company’s face book page here.

Related Video:

http://www.youtube.com/watch?v=bB5sfrbzI30

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My next blog entry will be on Thursday April 22, 2010.
Mullkam Samint!

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April 15, 2010 - Posted by | Ethiopian Businesses, Ethiopian Careers, Ethiopian Citizenship, Ethiopian Culture, Ethiopian Education, Ethiopian History, Ethiopian Investments, Ethiopian Media, Ethiopian Patriotism, Ethiopian Politics, Ethiopians & Technology, Ethiopians Back Home, Ethiopians in Vancouver | , , , , , , , , , , , , , , , , , , , , ,

1 Comment »

  1. it is wonderful News.I am happy to hear this. is it affordable to Know? how can we contact you for the detail.Thanks
    Mekibib

    Comment by Mekibibi | May 20, 2011 | Reply


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