Chinese automakers are increasingly establishing manufacturing operations in Africa, aiming to tap into the continent's rapidly growing population, expanding middle class, and increasing demand for affordable electric vehicles. This strategic shift is driven by slowing demand in China and rising trade barriers in Europe and North America.
Analysts suggest this move could significantly reshape Africa's automotive industry by creating jobs, fostering local supply chains, and accelerating the adoption of electric vehicles, despite challenges like weak infrastructure and policy uncertainty.
In July, Chery, China's largest auto exporter, acquired Nissan's former Rosslyn plant near Pretoria, South Africa. The company plans to produce plug-in hybrids, battery-electric vehicles, and models under its Jetour brand at the facility. This acquisition reflects a broader trend of Chinese automakers prioritizing local production closer to African consumers over sole reliance on imports.
Other Chinese manufacturers, including Beijing Automotive Group (BAIC) and Great Wall Motor, have existing automotive manufacturing, assembly, or localized component distribution in South Africa. Hiten Parmar, executive director of The Electric Mission, a South African nonprofit promoting sustainable mobility, noted that "Africa has become known as the next frontier for the automotive market."
Several African nations are positioned to attract Chinese investment in electric vehicle production. South Africa, Morocco, Kenya, Ethiopia, and Ghana are considered prime candidates due to their industrial capacity, supportive government policies, or developing electricity infrastructure. Morocco's proximity to European export markets and Zimbabwe's significant lithium reserves for battery supply chains are also advantageous.
Local manufacturing has the potential to reduce vehicle prices by circumventing import duties. It could also stimulate investment in charging infrastructure, component manufacturing, and battery production. Africa's first large-scale battery gigafactory is planned for Morocco. The affordability of Chinese brands, combined with rising incomes and rapid urbanization, is enabling these automakers to gain market share from established European, Japanese, and American brands. Parmar observed that "the affordability of Asian brands is providing a wider accessibility reach for new vehicles."
Nick Hedley, an energy transition research analyst at Zero Carbon Analytics, highlighted Africa's fast-growing population and expanding middle class as creating a natural market for accessible electric vehicles. This transition could also help African governments lessen their reliance on imported fuels. "Africa is also a net importer of refined fuels, which drains foreign reserves and weighs on local currencies and budgets," Hedley stated. "Switching to local electric cars for transportation is in African countries’ national interest."
The economics within China are also contributing to this shift. Tombo Banda, managing director of CrossBoundary Energy, explained that Chinese factories are producing more vehicles than the domestic market can absorb, while exports face increasing hurdles. "Onshoring production on the continent is a sound long-term investment," Banda said, adding that local manufacturing helps companies navigate tariffs and position themselves closer to rapidly growing markets.
Policies such as the African Union's Green Minerals Strategy aim to boost domestic processing of critical minerals, making raw materials more available locally. Ethiopia has banned imports of fossil fuel-powered vehicles and incentivizes local production through reduced import duties on domestically assembled EVs. South Africa, conversely, uses production incentives like customs duty rebates, production-linked credits, cash investments, and tax breaks to attract investment in electric and hydrogen-fueled vehicle manufacturing.
"This is becoming a notable change in approach from Asian brands, from pure imports, to considerations of assembly and manufacturing," Parmar commented. Banda emphasized that for Chinese manufacturers to access these markets effectively, they must "add value locally rather than simply sell into them," which he believes will transform Africa from a sales market into a genuine manufacturing base.
South Africa possesses existing manufacturing capacity, a skilled workforce, and established export markets, according to Banda. Acquiring existing facilities like the Rosslyn plant allows automakers to retool factories more quickly than building new ones from scratch. "Companies can pivot, or enter partnerships, far faster than anyone starting from scratch," he said.
However, Banda cautioned that converting factories designed for internal combustion engines is complex and requires long-term certainty regarding taxes, tariffs, and industrial policy. Stable policies are crucial, as sudden changes can erode investor confidence. Reliable infrastructure, particularly clean and affordable electricity and adequate charging facilities, is also vital for the successful operation of electric vehicles in Africa.