State think tank roots for electric cars to cut costs

The E9 Kubwa electric buses launched in the Kenyan market by e-mobility company BasiGo. [Denish Ochieng, Standard]

A public policy think tank has fronted the adoption of electric mobility as a gateway to ease the cost of living owing to how much influence fuel prices have on the movement of people and goods.

The Kenya Institute for Public Policy Research and Analysis(Kippra) argues that the country’s platform is ripe for all electric citing an excess of 800 MW generated and the growing retrofitting automobile sub-sector.

The retrofitting automobile subsector offers car owners the opportunity to swap their internal combustion engines with an electric one or hybrid.

Kippra also argues that the electric mobility sector also has the potential for revenue that can complement the fuel levy. Such revenue can be levied on innovators and startups investing in the sector.

Kippra documents in the 2023 Kenya Economic Report how effective electric mobility is as it lists the hazards brought about by fossil fuels.

For example, apart from electric vehicles having a higher fuel economy, it also argues that one of the competitive edges for this innovation, citing a small car but with no specifics of engine capacity, is that it has 350 Nm of torque compared to 150Nm for those using fossil fuel.

The other advantage is that an electric car is due for scheduled service at 12,000 km while a petrol counterpart will be due at 5,000 km.

Kippra anticipates that the adoption of electric mobility will ease pressure eventually on the cost of living, owing to the fact that the highest percentage of imported petroleum fuels is consumed in the transport sector.

“The value of petroleum products imported in 2022 was sh628.4 billion, and about 75 per cent of the petroleum sales was in the retail pump outlet and transport category,” the report reads.

The think tank notes that high fuel prices are a policy challenge for the cost of living and economic stability in Kenya Kwanza’s Bottom-up Economic Transformation Agenda.

This is because the sector most affected by the high cost of fuel is transport.

“The transport sector is not only a vital enabler of the economic activity and social connectivity but also one of the fastest growing energy end-use sectors,” the report states. “The bulk of energy used by the transport sector (about two-thirds) is accounted for by passenger transport while the rest is by freight.”

The report quotes the Index Rebasing Report 2020 which indicates that nationally, transport accounts for 9.65 per cent of total household expenditures. In Nairobi, this share goes up to 11.81 per cent.

The report indicates that bus and matatu fares were ranked second out of the top 10 expenditure components for households behind mobile phone airtime.

“With high fuel prices usually driven by fuel inflation, this will further increase the cost of living and, therefore, affect the ability of households to meet their needs.”

Kippra says reducing reliance on fossil fuels is not only a strategic shift to overcome undesired consequences that come with high fuel prices but also an effective way to build affordable and sustainable transport.

Reduce emissions

This is besides supporting the global efforts to decrease the production of fossil fuel by six per cent per year to limit global warming to 1.5 degrees Centigrade.

“Adoption of electric mobility, also known as vehicle electrification, is an innovative way to reduce the burden of fossil fuels and positively contribute to lowering transport costs and therefore the cost of living,” Kippra argues.

Kippra says having affordable, reliable and efficient transportation reduces transport-related costs across many economic sectors, while inefficient and unsustainable transport has the opposite effect.

“Adoption of electric mobility speeds up transition to a low carbon energy system necessary for affordable and sustainable transport,” the report says.

The argument to adopt electric mobility has always been approached from an environmental angle considering the detrimental effect fossil fuels have right from the mining to the usage due to carbon emissions.

While this is still a fact, as Kippra has noted in the report saying electric vehicles are cleaner for the environment, the cost of living is a pressing issue for the economy that depends heavily on fuel levies to raise the necessary revenue.

Over the last year, the cost of fuel has been steadily climbing surpassing the unimaginable sh200 per litre mark as the government withdrew subsidies.

Kippra says Kenya is well endowed with cheap renewable power resources and is strategically reducing its oil dependency in the transport sector by shifting to more sustainable and affordable energy.

“Of critical importance is the recognition of electric mobility as a socio-economic solution to offer cheap and sustainable transport,” the report says.  

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