Electric vehicles (EVs) hold significant appeal for the Ethiopian government, offering a multi-faceted advantage. EVs contribute to environmental goals by emitting zero tailpipe pollutants, aligning with climate initiatives while also curbing health concerns tied to air quality. The promotion of EVs aids energy security by reducing reliance on imported fossil fuels and leveraging homegrown renewable energy sources. Notably, this shift can alleviate foreign currency shortages arising from fuel imports. EVs present an economic edge through lower operating costs and maintenance expenses compared to conventional vehicles, bolstered by cheaper electricity prices. Furthermore, fostering the EV industry can catalyze economic growth and job creation, spanning manufacturing, infrastructure development, and technological advancements. This amalgamation of benefits underscores how EV adoption aligns with Ethiopia’s pursuit of sustainability, health improvement, economic stimulation, and overall citizen welfare.
In the dynamic landscape of the ride-sharing industry, the adoption of electric cars has emerged as a game-changing proposition. Electric vehicles (EVs) offer a promising path toward sustainability and cost-effectiveness. This analysis explores the financial aspects of integrating electric cars into the operations of ride-sharing drivers in Ethiopia, taking into account factors such as fuel and maintenance savings, operational costs, and the practicality of EVs within the local context and tries to show how Electric Cars Make Financial Sense For Ride Drivers in Ethiopia.
Fuel and Maintenance Savings:
The core advantage of electric cars for ride-sharing drivers lies in substantial fuel and maintenance savings. Compared to conventional petrol or hybrid cars, electric vehicles benefit from considerably lower fuel costs due to the economical nature of electricity. Notably, the cost per unit of energy for electricity is significantly lower than that of gasoline. The financial implications of this distinction become particularly pronounced when considering the high mileage typically covered by ride-sharing drivers. The Australian market analytics Zecar’s chart below compares the cost of ‘refuelling’ a car across different sources.
We’ve examined the data presented in the chart within the context of Ethiopia. To provide further clarification, we introduced data from Norway to enhance our insights and facilitate comparisons. As the data shown above pertains to June 9, 2022, for precise price evaluations, we gathered historical prices for electricity, fuel, and exchange rates from multiple sources within the same time frame.
The cost per 100km in Ethiopia and Norway is derived by taking the values provided for Australia and then multiplying them by the ratio of energy costs. Here’s the analysis:
Energy | Country | Rate | Cost 100KM(USD) | Exchange(USD-Birr) | Rate Birr | Cost for100KM Birr |
petrol (/L) | AU | 2.00 | 17.00 | 55.00 | 110.00 | 935.00 |
NO | 2.70 | 22.95 | 55.00 | 148.50 | 1262.25 | |
Et | 0.70 | 5.95 | 55.00 | 38.50 | 327.25 | |
Fast Charger(/kwh) | AU | 0.52 | 7.96 | 55.00 | 28.60 | 437.80 |
NO | 0.59 | 9.03 | 55.00 | 32.45 | 496.73 | |
Et | 0.14 | 2.14 | 55.00 | 7.70 | 117.87 | |
Home charger(/kwh) | AU | 0.25 | 3.83 | 55.00 | 13.75 | 210.65 |
NO | 0.29 | 4.44 | 55.00 | 15.95 | 244.35 | |
Et | 0.04 | 0.61 | 55.00 | 2.20 | 33.70 |
Given the absence of a public fast charger service in Ethiopia, I’ve employed the rate of change observed in-home charging costs versus public fast charging costs in Australia and Norway as a parameter for estimating the public charging price. In Australia, the cost of DC fast charging is nearly twice that of home charging, whereas, in Norway, fast charging expenses range from 2 to 4 times more, contingent upon charger type and operator. The operation of DC fast charging is classified as an industry business, entailing various economic factors such as operational logistics, investments, profit margins, and government subsidies.
An advantageous point is that the industrial electricity cost rate in Ethiopia notably undercuts that of comparable countries, thus serving as a compensatory factor for potential limitations in government funding for subsidies.
Furthermore, I’ve incorporated a 5-fold profit margin onto the kWh price for fast charging in Ethiopia within this calculation. This augmentation aims to offset and allow for additional expenses stemming from initial investments, parking fees, and ongoing operations.
The conclusion drawn from the graph is evident: the operational cost of electric cars within the Ethiopian context is significantly more affordable than that of both Australia and Norway.
Tailoring this analysis to Ethiopia’s specific conditions, it’s vital to consider the country’s energy landscape, charging infrastructure, and local policies. Ethiopia’s pursuit of renewable energy sources positions electric cars as a compelling choice. The availability of affordable hydroelectric power can contribute to making electric charging costs more affordable compared to traditional fossil fuels. Moreover, government incentives and reduced import duties on electric vehicles further enhance their attractiveness.
Cost of Ownership Comparison
Taking a closer look at the cost of ownership, let’s examine a popular electric car model in the Australian market and compare it against its petrol counterpart. By factoring in aspects such as upfront costs, registration, insurance, maintenance, fuel, and energy expenses, electric cars display a clear financial advantage over traditional vehicles.
Fuel type | Electric ⚡🔋 | Petrol ⛽ |
Driveaway price (Purchase + tax) | $46,990 | $30,990 |
Running costs | ||
Registration, insurance, tax | $2,047 | $1,727 |
Service, maintenance, tyres | $2,150 | $2,555 |
Fuel (energy) | $5,569 | $15,470 |
Total Cost | $9,766 | $19,752 |
Total Cost of Ownership (5-years) | $95,820 | $129,750 |
Saving in 5 years | $33,930 |
The table clearly shows that in 5 years electric car owners can save more than the value of petrol-equivalent car value in the Australian market. These savings are even more pronounced when spread over several years, contributing to the long-term profitability of ride-sharing ventures.
Benefits for Ride Drivers:
The provided table unmistakably illustrates that electric car owners can accrue savings over five years exceeding the value of an equivalent petrol car in the Australian market.
In the realm of shared transportation services like Uber/Ride, the potential for savings is even greater. Uber has implemented a reduced service charge for electric vehicle riders, resulting in an additional benefit of approximately $3500 USD. An Uber driver stands to gain annual savings of $13,486, achieved through a combination of reduced service fees and operational cost savings. This accumulates to an impressive $40,458 in savings over a three-year period. While I’m uncertain about the availability of discounts for electric car users in the Ethiopian context, both governmental and corporate sectors are anticipated to promote and encourage such initiatives.
Furthermore, the comparative price dynamics between petrol and electric options in Ethiopia outperform those of Norway and Australia. This differential offers an extra advantage for Ride drivers, generating supplementary benefits.
Ride-sharing drivers in Ethiopia can realize multifaceted benefits by transitioning to electric cars. Beyond the direct financial advantages, electric vehicles can align with a driver’s commitment to environmental responsibility. In addition, ride-sharing platforms like Uber may extend additional incentives to electric drivers, enhancing their earning potential. Over time, this combination of financial savings and potential bonuses can have a significant positive impact on a driver’s overall income.
Practicality and Charging Infrastructure:
There exists a prevalent misperception that electric cars aren’t suitable for taxi or ride-share drivers due to their limited range. However, the reality is quite different: modern electric cars offer a substantial range of capabilities that are likely to satisfy the average daily needs of an Uber driver.
The current average electric car on the market boasts an approximate range of 400 km. Even electric vehicles with slightly shorter ranges, falling between 200 to 250 km, can prove practical if there’s convenient access to fast charging infrastructure.
Another commonly held belief (though not always accurate) is that electric cars frequently fall short of their claimed range figures, typically measured by WLTP standards. Yet, depending on the specific electric vehicle model, Uber drivers have a solid chance of coming close to, and possibly even exceeding the officially stated range. This can be attributed to the favourable conditions of urban driving, where lower average speeds in stop-and-go traffic lead to diminished wind resistance and heightened energy recuperation through regenerative braking. These benefits are particularly prominent when utilizing the one-pedal driving mode available in most electric vehicle models. On the flip side, this driving style tends to have a negative impact on petrol cars, barring hybrids, due to their differing characteristics.
Additionally, the expansion of charging infrastructure, both in private spaces and public locations, is making it increasingly convenient for drivers to charge their vehicles during breaks or at the end of their shifts. Collaborative efforts between ride-sharing companies and charging station providers can further enhance the charging experience.
Conclusion
As Ethiopia ushers in a new era of sustainable transportation, ride-sharing drivers have a unique opportunity to benefit financially by embracing electric cars. The interplay of reduced fuel and maintenance costs, government incentives, and potential ride-sharing platform bonuses creates a compelling financial case for the transition. By strategically navigating the charging landscape and capitalizing on available benefits, ride-sharing drivers can not only enhance their profitability but also contribute to a greener future for transportation in Ethiopia.