IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v141y2023icp14-26.html
   My bibliography  Save this article

Are electric vehicles economically viable in sub-Saharan Africa? The total cost of ownership of internal combustion engine and electric vehicles in Tanzania

Author

Listed:
  • Malima, Gabriel Clement
  • Moyo, Francis

Abstract

The prevalence of internal combustion engine vehicle (ICEV) fleets globally has resulted in various environmental issues, such as the emissions of greenhouse gases, reliance on imported petroleum products, significant degradation of air quality, and adverse health impacts on people. To address these challenges, the adoption of electric vehicles (EVs) is viewed as a sustainable solution. This study analyzed the Total Cost of Ownership (TCO) of EVs in sub-Saharan Africa to determine if they are viable options for consumers from Tanzania. Contrary to previous studies on the competitive position of EVs that focused on Europe, Asia, and other regions with high EV diffusion, and are more advanced in terms of EV manufacturing capacity and promoting policies, this study focused on Tanzania, a country with low EV diffusion and no EV manufacturing capacity. We compared the economics of electric cars and electric two-wheelers (e2Ws) and their ICE counterparts. The findings show that the TCO per km of electric cars is higher than that of their ICE car counterparts, while the TCO of e2W was less than that of their petroleum counterparts. Importing taxes charged to all vehicles imported into the country significantly hike the upfront cost of EVs. For electric cars, particularly battery electric vehicles, to reach TCO parity with ICE car counterparts, the current import taxes have to be reduced by 40% or more, which is equivalent to removing all import duty or value-added taxes. In this regard, electric cars are still not economically viable for Tanzanian automotive consumers, unless economic incentives are introduced. With EVs being in the early stage in the country, it is recommended to start by promoting e2Ws, which are economically viable for many consumers in the Tanzanian context.

Suggested Citation

  • Malima, Gabriel Clement & Moyo, Francis, 2023. "Are electric vehicles economically viable in sub-Saharan Africa? The total cost of ownership of internal combustion engine and electric vehicles in Tanzania," Transport Policy, Elsevier, vol. 141(C), pages 14-26.
    • Handle: RePEc:eee:trapol:v:141:y:2023:i:c:p:14-26
    DOI: 10.1016/j.tranpol.2023.07.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X23001889
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2023.07.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sendek-Matysiak Ewelina & Krzysztof Grysa, 2021. "Assessment of the Total Cost of Ownership of Electric Vehicles in Poland," Energies, MDPI, vol. 14(16), pages 1-20, August.
    2. Li,Shanjun & Wang,Binglin & Yang,Muxi & Zhang,Fan, 2021. "The Global Diffusion of Electric Vehicles : Lessons from the First Decade," Policy Research Working Paper Series 9882, The World Bank.
    3. Al-Alawi, Baha M. & Bradley, Thomas H., 2013. "Total cost of ownership, payback, and consumer preference modeling of plug-in hybrid electric vehicles," Applied Energy, Elsevier, vol. 103(C), pages 488-506.
    4. Wang, Shanyong & Wang, Jing & Li, Jun & Wang, Jinpeng & Liang, Liang, 2018. "Policy implications for promoting the adoption of electric vehicles: Do consumer’s knowledge, perceived risk and financial incentive policy matter?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 117(C), pages 58-69.
    5. Wu, Geng & Inderbitzin, Alessandro & Bening, Catharina, 2015. "Total cost of ownership of electric vehicles compared to conventional vehicles: A probabilistic analysis and projection across market segments," Energy Policy, Elsevier, vol. 80(C), pages 196-214.
    6. Breetz, Hanna L. & Salon, Deborah, 2018. "Do electric vehicles need subsidies? Ownership costs for conventional, hybrid, and electric vehicles in 14 U.S. cities," Energy Policy, Elsevier, vol. 120(C), pages 238-249.
    7. Scorrano, Mariangela & Danielis, Romeo & Giansoldati, Marco, 2020. "Dissecting the total cost of ownership of fully electric cars in Italy: The impact of annual distance travelled, home charging and urban driving," Research in Transportation Economics, Elsevier, vol. 80(C).
    8. Wenbo Li & Ruyin Long & Hong Chen & Baoqi Dou & Feiyu Chen & Xiao Zheng & Zhengxia He, 2020. "Public Preference for Electric Vehicle Incentive Policies in China: A Conjoint Analysis," IJERPH, MDPI, vol. 17(1), pages 1-16, January.
    9. Karl Storchmann, 2004. "On the Depreciation of Automobiles: An International Comparison," Transportation, Springer, vol. 31(4), pages 371-408, November.
    10. Gilmore, Elisabeth A. & Lave, Lester B., 2013. "Comparing resale prices and total cost of ownership for gasoline, hybrid and diesel passenger cars and trucks," Transport Policy, Elsevier, vol. 27(C), pages 200-208.
    11. Moon, Saedaseul & Lee, Deok-Joo, 2019. "An optimal electric vehicle investment model for consumers using total cost of ownership: A real option approach," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    12. Ouyang, Danhua & Zhou, Shen & Ou, Xunmin, 2021. "The total cost of electric vehicle ownership: A consumer-oriented study of China's post-subsidy era," Energy Policy, Elsevier, vol. 149(C).
    13. Lebeau, Philippe & Macharis, Cathy & Van Mierlo, Joeri, 2016. "Exploring the choice of battery electric vehicles in city logistics: A conjoint-based choice analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 245-258.
    14. Liu, Zhe & Song, Juhyun & Kubal, Joseph & Susarla, Naresh & Knehr, Kevin W. & Islam, Ehsan & Nelson, Paul & Ahmed, Shabbir, 2021. "Comparing total cost of ownership of battery electric vehicles and internal combustion engine vehicles," Energy Policy, Elsevier, vol. 158(C).
    15. Palmer, Kate & Tate, James E. & Wadud, Zia & Nellthorp, John, 2018. "Total cost of ownership and market share for hybrid and electric vehicles in the UK, US and Japan," Applied Energy, Elsevier, vol. 209(C), pages 108-119.
    16. Wang, Ning & Pan, Huizhong & Zheng, Wenhui, 2017. "Assessment of the incentives on electric vehicle promotion in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 177-189.
    17. Lévay, Petra Zsuzsa & Drossinos, Yannis & Thiel, Christian, 2017. "The effect of fiscal incentives on market penetration of electric vehicles: A pairwise comparison of total cost of ownership," Energy Policy, Elsevier, vol. 105(C), pages 524-533.
    18. Bubeck, Steffen & Tomaschek, Jan & Fahl, Ulrich, 2016. "Perspectives of electric mobility: Total cost of ownership of electric vehicles in Germany," Transport Policy, Elsevier, vol. 50(C), pages 63-77.
    19. Danielis, Romeo & Giansoldati, Marco & Rotaris, Lucia, 2018. "A probabilistic total cost of ownership model to evaluate the current and future prospects of electric cars uptake in Italy," Energy Policy, Elsevier, vol. 119(C), pages 268-281.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adu-Gyamfi, Gibbson & Asamoah, Ama Nyarkoh & Obuobi, Bright & Nketiah, Emmanuel & Zhang, Ming, 2024. "Electric mobility in an oil-producing developing nation: Empirical assessment of electric vehicle adoption," Technological Forecasting and Social Change, Elsevier, vol. 200(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kondev, Bozhil & Dixon, James & Zhou, Zhaoqi & Sabyrbekov, Rahat & Sultanaliev, Kanat & Hirmer, Stephanie A., 2023. "Putting the foot down: Accelerating EV uptake in Kyrgyzstan," Transport Policy, Elsevier, vol. 131(C), pages 87-96.
    2. Santos, Georgina & Rembalski, Sebastian, 2021. "Do electric vehicles need subsidies in the UK?," Energy Policy, Elsevier, vol. 149(C).
    3. Schwab, Julia & Sölch, Christian & Zöttl, Gregor, 2022. "Electric Vehicle Cost in 2035: The impact of market penetration and charging strategies," Energy Economics, Elsevier, vol. 114(C).
    4. Maxwell Woody & Shawn A. Adderly & Rushabh Bohra & Gregory A. Keoleian, 2024. "Electric and gasoline vehicle total cost of ownership across US cities," Journal of Industrial Ecology, Yale University, vol. 28(2), pages 194-215, April.
    5. Mariangela Scorrano & Terje Andreas Mathisen & Marco Giansoldati, 2019. "Is electric car uptake driven by monetary factors? A total cost of ownership comparison between Norway and Italy," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 99-132.
    6. Schloter, Lukas, 2022. "Empirical analysis of the depreciation of electric vehicles compared to gasoline vehicles," Transport Policy, Elsevier, vol. 126(C), pages 268-279.
    7. Hao, Xu & Lin, Zhenhong & Wang, Hewu & Ou, Shiqi & Ouyang, Minggao, 2020. "Range cost-effectiveness of plug-in electric vehicle for heterogeneous consumers: An expanded total ownership cost approach," Applied Energy, Elsevier, vol. 275(C).
    8. Liu, Zhe & Song, Juhyun & Kubal, Joseph & Susarla, Naresh & Knehr, Kevin W. & Islam, Ehsan & Nelson, Paul & Ahmed, Shabbir, 2021. "Comparing total cost of ownership of battery electric vehicles and internal combustion engine vehicles," Energy Policy, Elsevier, vol. 158(C).
    9. Scorrano, Mariangela & Danielis, Romeo & Giansoldati, Marco, 2020. "Dissecting the total cost of ownership of fully electric cars in Italy: The impact of annual distance travelled, home charging and urban driving," Research in Transportation Economics, Elsevier, vol. 80(C).
    10. Gábor Horváth & Attila Bai & Sándor Szegedi & István Lázár & Csongor Máthé & László Huzsvai & Máté Zakar & Zoltán Gabnai & Tamás Tóth, 2023. "A Comprehensive Review of the Distinctive Tendencies of the Diffusion of E-Mobility in Central Europe," Energies, MDPI, vol. 16(14), pages 1-29, July.
    11. Breetz, Hanna L. & Salon, Deborah, 2018. "Do electric vehicles need subsidies? Ownership costs for conventional, hybrid, and electric vehicles in 14 U.S. cities," Energy Policy, Elsevier, vol. 120(C), pages 238-249.
    12. Ouyang, Danhua & Zhou, Shen & Ou, Xunmin, 2021. "The total cost of electric vehicle ownership: A consumer-oriented study of China's post-subsidy era," Energy Policy, Elsevier, vol. 149(C).
    13. Amela Ajanovic & Reinhard Haas, 2020. "On the economics and the future prospects of battery electric vehicles," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 10(6), pages 1151-1164, December.
    14. Piotr Wróblewski & Wojciech Lewicki, 2021. "A Method of Analyzing the Residual Values of Low-Emission Vehicles Based on a Selected Expert Method Taking into Account Stochastic Operational Parameters," Energies, MDPI, vol. 14(21), pages 1-24, October.
    15. Palmer, Kate & Tate, James E. & Wadud, Zia & Nellthorp, John, 2018. "Total cost of ownership and market share for hybrid and electric vehicles in the UK, US and Japan," Applied Energy, Elsevier, vol. 209(C), pages 108-119.
    16. Martins, H. & Henriques, C.O. & Figueira, J.R. & Silva, C.S. & Costa, A.S., 2023. "Assessing policy interventions to stimulate the transition of electric vehicle technology in the European Union," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    17. Ranjit R. Desai & Eric Hittinger & Eric Williams, 2022. "Interaction of Consumer Heterogeneity and Technological Progress in the US Electric Vehicle Market," Energies, MDPI, vol. 15(13), pages 1-25, June.
    18. Danielis, Romeo & Giansoldati, Marco & Scorrano, Mariangela, 2019. "Consumer- and society-oriented cost of ownership of electric and conventional cars in Italy," Working Papers 19_3, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    19. Mohammadzadeh, Narges & Zegordi, Seyed Hessameddin & Nikbakhsh, Ehsan, 2021. "Pricing and free periodic maintenance service decisions for an electric-and-fuel automotive supply chain using the total cost of ownership," Applied Energy, Elsevier, vol. 288(C).
    20. Kamilė Petrauskienė & Arvydas Galinis & Daina Kliaugaitė & Jolanta Dvarionienė, 2021. "Comparative Environmental Life Cycle and Cost Assessment of Electric, Hybrid, and Conventional Vehicles in Lithuania," Sustainability, MDPI, vol. 13(2), pages 1-17, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:141:y:2023:i:c:p:14-26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.