Over the past year, the Ethiopian government has implemented several tax incentives to promote the adoption of electric vehicles (EVs) in the country. These incentives include exemptions from value-added tax (VAT), surtax, excise tax, and customs duty tax for electric vehicles and knocked-down kits used for local assembly. As a result, there has been a significant increase in the number of EVs on the roads of Ethiopia’s capital city, Addis Ababa.
Renowned e-mobility expert Axel Conrad has noted that Chinese-made EVs, particularly the Volkswagen ID models, have become increasingly common in showrooms and on the roads of Addis Ababa. Additionally, popular EV models like the Toyota bZ4x, Mercedes-Benz EQ range, and Changan Ben Ben E-Star have gained noticeable traction in the Ethiopian market. Unofficial reports estimate that around 5,000 to 7,000 electric cars have entered the Ethiopian market since the tax incentives were introduced.
This surge in EV adoption showcases the potential for policy interventions to drive electric mobility in Africa. By relaxing import taxes on EVs, governments can accelerate the transition to cleaner transportation and reduce the continent’s dependence on fossil fuels. The growth of EV imports in Ethiopia surpasses that of other major African countries, highlighting the country’s potential as a leader in electric mobility.
Despite the increasing number of EVs, public charging infrastructure in Ethiopia remains limited. However, most EV owners charge their vehicles at home due to the country’s low electricity tariffs, which are among the lowest in Africa. With residential tariffs close to 1 US cent/kWh, EV owners in Ethiopia can significantly save on fuel costs compared to traditional petrol-powered vehicles. Furthermore, the country’s electricity generation primarily relies on hydropower, ensuring that EVs are charged using clean energy.
As more EVs flood the market, it becomes crucial for Ethiopia to establish official channels for importation and distribution. By ensuring EVs are available through authorized dealerships, consumers can benefit from warranty support, boosting confidence in the sector. Currently, imports of the VW ID range have been temporarily suspended due to unauthorized imports from China.
With Ethiopia leading the way in electric vehicle adoption, it serves as an encouraging example for other African countries to follow suit. By removing barriers to EV ownership and fostering an enabling environment, governments across the continent can accelerate the shift towards sustainable transportation.
