Tesla is worth more than Toyota; here’s why this is great news for Africa
Although it might sound counterintuitive, revolutions never happen in a day. It is the one, symbolic moment that is usually engraved in the collective memory, symbolising change for the next generations. Even the most iconic moments we all remember come only after many years (sometimes even decades or centuries) of slow brewing and development, in which the revolution matures enough to break out, and change our lives.
During the last few months, historic moments are literally at an all-time high, touching every aspect in our lives. Earlier this month we witnessed an example of a symbolic moment, which may, with time, prove to be of historical significance. This event led the automotive industry into a global discussion about the revolution of the electric vehicles, expected to disrupt one of the most influential sectors of our modern life: transportation.
For many years now, many agree that the electric vehicle revolution is inevitable. All over the world governments and companies realise that absolute reliance on pollutants and consumables fuels is unsustainable, creating non-reversible damage to our planet. Just like the energy market, which is shifting towards sustainable solutions (such as solar and wind), the transportation sector can no longer ignore the changing reality. Transforming to new, green technologies is almost inevitable.
The most recognised leader of the electric vehicle revolution is undoubtedly the American manufacturer Tesla, founded by billionaire entrepreneur Elon Musk. After launching fully electric powered vehicles and offering an advanced user experience covered with prestigious marketing, it gained a global reputation. The company’s value climbed, and Tesla left many traditionals car empires behind, en route to the top of the global automotive market. Yet, the “top of the pyramid” remains at the hands of Japanese giant Toyota, which has been around for almost 90 years and sold over 10.7 million cars in 2019 alone.
On June 10, the entire global transportation sector was shaken. An anonymous Twitter account posted a screenshot of the world’s top 10 carmakers, according to their market value. For the first time, Tesla took the lead, with a market cap of $183.67 billion — and topped Toyota, valued at “only” $178.78 billion. The tweet even gained a “like” from Musk himself, sparking world-wide discussions about “the upheaval.”
While the numbers of the two auto giants has changed since then and will change a lot in the future (and the significance of such value can also be debated), the estimation of Tesla reflects the most important thing: the investors’ belief in the ability of the company to finally occupy the top of the list, and to lead the world into a greener and more sustainable future.
Like any other shift, the electric car revolution will bring with it quite a few losers (especially veteran car manufacturers and fuel suppliers who will not be able to adapt their operations to changing reality), as well as huge opportunities. Beyond the potential for massive environmental impact and mega-savings in emissions of pollutant gases all over the world, the electric vehicle revolution may also be particularly beneficial to Africa.
Today, the Sub-Saharan region holds a particularly low ratio of vehicles per capita: only 3 vehicles per 100 people, compared to the global average which stands at 18.2 (as of 2017). In addition, the number of new vehicles sold on the continent stands at approximately 700,000 new vehicles per year, less than 1 per cent of total new vehicle sales worldwide. And in the absence of new vehicles, most vehicles in Africa are outdated and very polluting.
Just as in many other sectors, Africa now faces a great opportunity to leapfrog over the familiar, traditional automotive realm, and skip straight to the new, more sustainable and advanced era. Several countries have already started to take active actions, such as the national plan launched by the Rwandan government less than a year ago, establishing a collaboration with German manufacturer Volkswagen and Siemens to promote the sector and make Rwanda a global leader in adopting and piloting the emerging technology.
Time to take the lead
National programs are important to realise the potential of the electric vehicle revolution, and to increase its impact on Africa. The rise of Tesla as the leading global carmaker shows that this is not a passing trend or a farfetched dream — but a tangible revolution. The technology is here to stay, and shape our lives in the not-very-far future.
Electric transportation will allow a clean, green and sustainable solution to the entire world, and can also provide a huge boost to the African economy. If local governments continue to expand their efforts, invest in national programs and make Africa a world leader in piloting and executing big-scale programs, the entire continent could soon become a major hub for one of the hottest sectors across the technology realm, creating economic development, more technical jobs, developing local companies, and more.
Tesla’s market value will continue to change, rising and falling with time. But the electric vehicles revolution is just beginning: taking the right steps, Africa can become a significant force in the revolution, leading the entire world to a greener and more sustainable future for everyone.
Originally published at https://www.newtimes.co.rw on June 29, 2020.