Middle East conflict is accelerating Africa’s shift to electric ride-hailing, Uber’s EV partner says
Bloomberg reports that Uber’s South African EV partner is accelerating expansion into African markets as higher fuel prices linked to renewed Middle East tensions strengthen the business case for electric mobility. | Business Insider Africa
The renewed conflict involving the United States and Iran is creating an unexpected winner in Africa’s transport sector- electric vehicles. As concerns over disruptions to Middle East oil supplies pushed global fuel prices higher, ride-hailing operators across Africa are increasingly looking to electric vehicles as a way to shield drivers from volatile petrol costs. That trend is already becoming evident in South Africa, where Uber’s partner in Africa’s first low-cost electric ride-hailing service says demand is accelerating, with plans already underway to expand beyond the country’s borders. According toBloomberg, Durban-based fleet operator Valternative, which launched Uber’s affordable electric vehicle (EV) pilot in Johannesburg, believes the latest geopolitical tensions have strengthened the business case for electric mobility across Africa. “What Covid did for delivery in South Africa is what this conflict is doing for electrification,” Valternative co-founder Mahomed Jeewa told Bloomberg. Fuel shocks reshape mobility economicsThe renewed Middle East conflict has exposed just how vulnerable many African economies remain to imported fuel. South Africa, despite being one of Africa’s most industrialised economies, imports much of its refined fuel. Earlier this year, the government sought alternative suppliers after disruptions to Middle East shipments threatened domestic supplies, while increasing imports from the United States to cushion the impact. For ride-hailing drivers whose incomes depend heavily on daily fuel expenses, every increase in petrol prices immediately raises operating costs. Electric vehicles, once viewed largely as an environmental alternative, are increasingly being considered a financial one. Uber doubles down on South AfricaThe development also aligns with Uber’s broader investment strategy in Africa’s largest industrial economy. In March, Uber announced plans to invest about $298. 61 million (R5 billion) in South Africa over the next three years to expand mobility services, delivery operations, charging infrastructure and electric vehicle partnerships. Valternative’s Johannesburg pilot forms part of that broader push. The company is deploying about 360 Henrey EV4 vehicles in northern Johannesburg, with plans to expand the fleet before entering additional South African cities. According to Bloomberg, the project was launched after rival ride-hailing platform Bolt introduced cheaper rides using petrol-powered Bajaj Qute quadricycles, prompting Uber to seek a lower-cost electric alternative. Africa expansion underwayValternative now wants to replicate the model across the continent. The company plans to expand first into Egypt, Morocco, Ghana and Côte d’Ivoire, with ambitions to eventually operate in eight African countries, Bloomberg reported. Those markets are emerging as some of Africa’s most promising destinations for electric mobility. Morocco has positioned itself as a regional manufacturing hub for electric vehicle components and batteries, while Egypt has expanded investments in electric transport infrastructure as governments across North Africa seek to reduce fuel imports and lower emissions. Challenges remainDespite growing momentum, major barriers continue to slow EV adoption across Africa. South Africa imposes a 25% import duty on electric vehicles, compared with 18% for petrol and diesel-powered cars, making EVs significantly more expensive to acquire. The country also lacks an extensive public charging network and still generates most of its electricity from coal, limiting some of the environmental gains associated with electric transport. Drivers involved in Uber’s pilot have also raised operational concerns, including long charging times and limited coverage areas, which reduce the number of trips they can complete each day. To address those issues, Valternative plans to roll out six to seven new charging sites every month over the next year, introduce solar-powered charging hubs and retrofit existing vehicles with cabin heaters. A turning point for Africa’s EV market?The irony is that a geopolitical crisis centred thousands of kilometres away may end up accelerating one of Africa’s biggest transport transitions. As fuel prices become more unpredictable, the economics of electric mobility are improving, particularly for commercial fleets that spend heavily on fuel every day. For companies like Uber, the shift is no longer being driven solely by climate commitments. It is increasingly becoming a business decision shaped by energy security, operating costs and long-term profitability. “We are totally under-supplied. We plan to expand out of South Africa as soon as Uber gives us some breathing space,” Jeewa told Bloomberg.