First Step for Ethiopia’s EV Revolution
In January 2024, Ethiopia became the first African country to ban the import of new petrol and diesel private vehicles, mandating a nationwide shift to electric vehicles (EVs). This decisive move was driven by the need to cut down on the country’s substantial fuel import amounting to over €6 billion in 2023 and ease the pressure on “scarce” foreign currency reserves.
Ethiopia’s relatively low electricity costs thanks to abundant hydroelectric power and a strong commitment to renewable energy generation provided an ideal foundation for this transition.
Harnessing Renewable Energy for EVs
Ethiopia’s EV ambitions are underpinned by its dominance in hydropower, which accounts for roughly 90% of the country’s electricity supply. Major infrastructure projects are expanding this capacity, including:
- Grand Ethiopian Renaissance Dam (GERD): Currently generating around 1,550 MW, with an expected total capacity of 5,000 MW.
- Genale Dawa III Hydropower Plant (254 MW) and Assela Wind Farm (100 MW), adding diversity to Ethiopia’s energy mix.
Early Success
Ethiopia had a plan to catalyse the adoption of electric vehicles with a 10-year target to see 148,000 electric cars and close to 50,000 electric buses on its roads by 2030. The country has made incredible progress in the first two years – the Ministry of Transport and Logistics recently said that there were currently over 100,000 electric vehicles, including private cars, buses, and minibuses. Targets for EVs have now been revised upwards to around 500,000 by 2030.
Infrastructure Expansion
To support the growing EV fleet (estimated at 10% currently), the government’s 2025 plan focuses on installing public charging stations every 50–120 km. A comprehensive licensing and standards framework is also being introduced. Although the country started with limited public chargers, spare parts, and trained technicians, rapid expansion efforts are now underway.
Incentives & Local Industry
To encourage EV adoption, the Ethiopian government has offered financial incentives:
- Import duties: 15% on fully built EVs and just 5% on knocked-down kits.
- Tax exemptions: EVs are exempt from VAT, surtax, and excise duties
Local assembly initiatives have also gained momentum.
Challenges on the Road Ahead
Despite these efforts, Ethiopia’s EV transition has been limited to urban centres due to challenges like frequent power outages and slow charging speeds at homes and stations. The development of a widespread and reliable charging infrastructure has had limited success to date. Additionally, while wealthier consumers have led early EV adoption the country needs affordable models to make EVs more accessible.
The Road Ahead
Moving forward, Ethiopia’s integrated strategy which combines renewable power expansion, fiscal incentives, infrastructure growth, skill development, and local manufacturing represents a bold, coordinated vision. If things go as plan, EVs could account for 30–50% of Ethiopia’s vehicle fleet by 2030, setting a benchmark for clean, sustainable mobility in Africa. The growth of EV assembly, battery production, and charging infrastructure is expected to generate thousands of new jobs, while inspiring other African nations.
Notably, countries like Rwanda and Kenya in Africa are now actively promoting electric vehicles, taking a cue from Ethiopia’s pioneering efforts. More countries are expected to follow.
Rwanda and Kenya, in East Africa, are now actively promoting electric vehicles, taking a cue from Ethiopia’s pioneering efforts. Will more countries in the region follow suit?
The author, Akshay Shetty, is a Senior Analyst in AGR, Mumbai, with a deep interest in energy transition
