Despite low car ownership rates, Ethiopia is among the leading countries in EV penetration. So, what's making EV so popular in Ethiopia?
. . .
Ethiopia is among the African countries with the lowest car ownership rates. However, it has surprised the market by being among the top 5 countries leading in electric vehicle penetration. Currently, over 100,000 EVs have hit the roads in Ethiopia, accounting for about 8% of the total registered vehicles. Globally, this percentage is just about 4. In 2024, over 60% of new car sales in Ethiopia were EVs, while the number was 20% on a worldwide scale. This is a reflection of the country’s superior acceleration in taking on EVs. Projections indicate the total number of EVs to surpass 500,000 by 2030. 1
Why are Ethiopians on an EV shopping spree?
Ethiopia became the first country in the world to ban ICE (Internal Combustion Engine) vehicles in 2023. In 2025, the ban stretched to SKD (Semi Knocked Down) and CKD (Complete Knocked Down) vehicle imports. This policy approach came with import duty waivers and exemption from VAT, excise tax, and Surtax for EVs. For semi-assembled imports, which is reduced to 5%, it is a steep drop from the 200% on ICE vehicles. The government is doing the most to deter the use of ICE. Directives were followed through, making EVs exclusively available and affordable.
Many buyers went with the flow, being practical. The country’s situation only fostered it. Currency float, which at one time fell by 100%, made fuel cars outrageously pricey. Add to that a soaring fuel price, but an African low electric tariff, and EV becomes financially sound. Besides, these electrified cars have fewer moving parts, and so fewer repairs. No ICE means no need for oil change hassle. Stats show the EV maintenance and repair cost per mile is about 40% lower than that of fuel vehicles.
The big names knew this was big
Global EV manufacturers wasted no time jumping into the Ethiopian market. In the final months of 2024, the largest maker, BYD, partnered with Moenco for sales and after-sales services of 5 of its car brands. In mid-2025, GEELY Auto Group partnered with Kerchanshe Group for sales and after-sales. GAC, another leader in production, teamed up with Huajian Group for sales and distribution. Except for MOENCO, the local collaborators are from totally different industries. They just couldn’t afford to let the opportunity pass by.
Local big players like the BK Group became pioneers, planting an extensive EV production site in 2024. Others, like Marathon Motors, have transformed their establishments for EV manufacturing. Eager to take advantage of the vastly incentivized EV adoption and keep up with the market, many more are in line to join.
Can we even handle the EV disruption?
Not everyone is upbeat about the situation. Some were upset as the ICE vehicle ban was a sudden strike to their businesses. Concerns also rise from the infrastructure not yet being in place. Because most imports are made for Chinese markets, our ragged roads might be too rough. Installation of charging stations hasn’t caught up with the EV influx, leaving most to rely on power at home. This is a common inconvenience in apartment houses and places with power fluctuations.
In addition, many are unsettled by the arguable durability of the vehicles and the lack of service stations. There are also regulatory developments where manufacturers seeking license plates are required to provide the usual ICE information. The insurance sector is also testing the waters, demanding elevated premiums to insure EVs. Banks, hesitant to fund electric cars with concerns about battery life, curbed loans to a maximum of 5 years.
The Minister of Transport and Logistics has finally taken measures to ensure compliance with international EV guidelines. Last month, it introduced new directions for importers to verify EV battery safety standards. This incited criticism from small-scale importers, who described the complexity of the supply chain as a hurdle for them to obtain authentication documents. Another prerequisite was for English to be the vehicle’s software language, the provision of in-house after-sales services, and the installation of two charging stations. We are yet to see the impact on the state of the market. [7]
Ethiopia, a potential production hub?
The Ethiopian market isn’t the only subject of interest, but also its vast production prospects. As the global sharp rise of EV adoption continues, producers toil to sustain input supply. A major component being battery, its chief constituents, Lithium and Cobalt, are in high demand. The Southern and Eastern parts of Ethiopia have a significant Cobalt and Lithium deposit.
Advancing explorations and leveraging industries for EV battery manufacturing, it can capitalize on the burgeoning domestic production. In-house productions will stir up the economy as well as further reduce EV prices. Gradually launching into the global supply chain, it would amplify its economy by billions. Of course, it is a capital-heavy and skills-intensive investment. Conceivably, this could be one of those sectors that revolutionise a country. [4] [5]
