The Ethiopian government had kept car ownership rates low with its dramatically high taxes on gas-powered vehicles that cost consumers up to three times the value of car imports — part of an. Contact online >>
The Ethiopian government had kept car ownership rates low with its dramatically high taxes on gas-powered vehicles that cost consumers up to three times the value of car imports — part of an...
According to the Ministry of Transport, more than half of Ethiopia''s fuel imports in 2023 were used in transport and logistics. Electric vehicles can be powered by homegrown energy due to the country''s abundant hydropower resources. Most vehicles driven in Ethiopia are second-hand with higher pollution levels than newer models.
Authorities have claimed some success in enforcing the ban on non-electric vehicles entering Ethiopia, and more than 100,000 electric cars are now being imported into the country each month. The official target is to increase the monthly import figure to 500,000 by 2030.
A year ago, the Ethiopian government introduced some incentives to catalyze the adoption of electric vehicles. Ethiopia''s Ministry of Finance exempted all electric vehicles from VAT,...
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Rapid technological developments and policy changes are creating new opportunities for U.S. businesses in Ethiopia. In January 2024, as part of its shift to a green economy, the government of Ethiopia (GOE) became the first country to ban the importation of internal combustion engine vehicles. This groundbreaking legislation opens the door for U.S. electric vehicle (EV) manufacturers and suppliers of supporting infrastructure.
There are currently more than 30,000 EVs in Ethiopia, including both passenger and commercial vehicles. By 2032, the GOE expects 148,000 passenger EVs and 4,855 commercial EVs will be in the market. The public sector is leading the charge—in 2022, the city of Addis Ababa purchased 110 electric buses at a cost of $15 million.
The GOE is working to make the process of importing EVs and EV parts easier and more affordable. In addition to the elimination of VAT, surtax, and excise taxes on EV imports, the customs duty for partially assembled EVs is even lower, at only 5%. Currently, nine Ethiopian firms assemble vehicles from semi knock-down kits. Brands assembled in Ethiopia include Kia, Hyundai, Isuzu, Peugeot, and IVECO, as well as lesser-known Chinese brands.
In addition, the GOE is considering non-financial and operational privileges for EV owners.These may include constructing public charging stations, provision of special license plate numbers, and further incentives to minimize the end users'' cost.
Ethiopia''s rapid embrace of electric vehicles is a strong signal of its desire to shift away from vehicles dependent on expensive imported fuel.
While Chinese-manufactured EVs are becoming common in Ethiopia, the EV market is still new enough and large enough for U.S. firms to showcase their leading technologies and solutions.
With Ethiopia''s recent commitment to 100% electric vehicles, U.S. EV companies should strongly consider this unique first-mover business opportunity—particularly among higher-end market segments where consumers are prepared to pay a premium for products with global brand recognition and reputations for high quality.
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Addis Ababa November 25/2024 (ENA) Government''s continued interventions and incentives in the transport sector are accelerating Ethiopia''s transition towards green mobility, according to Transport and Logistics State Minister Bareo Hassen.
Bareo told ENA that Ethiopia has been pushing various activities into the transport sector through policy support and financial incentives over the past few years to realize a transition to green mobility.
Recently, Ethiopia embarked on the latest advancements in electric vehicles (EVs) and green technologies, demonstrating cutting-edge solutions and products that contribute to sustainability and environmental protection.
The State Minister explained that financial incentives are being provided for investors engaged in manufacturing the Electric Vehicles including assemblers and importers, to encourage both domestic and foreign investors.
The government has implemented favorable policies for the electric vehicle sector in the past few years, including a mere 5 percent duty on imported electric cars, with partially imported vehicles exempt from duty.
"These interventions show that Ethiopia is a pioneer and a champion for E-mobility implementations for Africa," he said.
Currently, 15 private investors are assembling EVs in Ethiopia besides the expanding number of EVs importers.
Moreover, the government is working on expanding EVs production, public charging stations and will offer support such as free or leased land for investors in EVs after sales service, he added.
"Ethiopia is working on green mobility and transport sector electrification," Bareo said.
He further stated that "From policy wise, we are giving policy incentives for the private sector, international companies, and also the sector."
For him, the government''s strategy and policy response are very attractive for investors.
"We had already banned the conventional vehicles in process. But to replace conventional vehicles with electric vehicles, we make the electric vehicles investment smooth for those private sectors and also international companies. They can get credit and tax free services. And also, we are working on the availability of land for them," he added.
Ethiopia has fully used renewable energy sources in the rail way transport and is accelerating the transition to green mobility by encouraging Electric Vehicles (EVs) in its roads, the state minister stated. He also pointed out the electrified Addis Ababa and Ethio-Djibouti rail transports as well as the increasing of Electric Vehicles transport in the country.
Ethiopia''s commitment to green mobility is rooted in its vast renewable energy potential, and by harnessing these renewable energy sources, it aims to build a sustainable transport sector, contributing to global climate change mitigation efforts and setting a precedent for other African countries.
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