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EV Sales in Ethiopia Exceed 60% of New Car Sales
According to the Ethiopian Energy Outlook 2025, more than 60% of newly registered personal automobiles in Ethiopia were electric in 2024, indicating a dramatic shift in the nation's energy and transportation industries. This surge in electric vehicle (EV) adoption follows a series of government initiatives aimed at reducing dependence on imported petroleum and leveraging Ethiopia’s abundant renewable electricity resources. The country currently spends more than $4 billion annually on fossil fuel imports, placing considerable pressure on its foreign currency reserves.
Ethiopia’s EV fleet has seen rapid growth, tripling from 4,600 vehicles in early 2023 to around 14,000 by early 2025. As of 2022, total vehicle registrations in the country reached 1.4 million—including 290,000 automobiles—with most new car purchases occurring in the capital, Addis Ababa.
A number of incentives have been put in place by the government to encourage the use of electric vehicles (EVs). These include complete exemptions from VAT, excise tax, and surtax, as well as drastically lowered customs duties, which are 5% for vehicles that are semi-assembled and 0% for locally assembled completely knocked-down (CKD) units. At the same time, it has imposed restrictions on the import of internal combustion engine (ICE) vehicles, such as limiting access to foreign currency for such purchases.
As a result of these measures, EVs now make up around 5 percent of the total vehicle fleet and contribute just 0.2 percent to the national electricity demand. The government has set an ambitious goal of having 148,000 EVs on the road by 2030.
However, with annual new car registrations averaging only 20,000 units, achieving this target may be difficult without a faster rate of EV adoption or significant changes in the car import landscape.
To accommodate the rising number of electric vehicles (EVs), the government has mandated the development of a public charging network. All stations must be connected to the distribution grid and operate under a market-based electricity pricing system. Additionally, there are plans to install charging stations along major transport routes at intervals ranging from 50 to 120 kilometers.
Nonetheless, a number of difficulties still exist. The availability of spare parts, EV maintenance services, and public charging infrastructure are still restricted. At present, most EV charging occurs at private residences or businesses with direct electricity access.
At the same time, new policy measures have been introduced for two- and three-wheeled vehicles. These include limiting the use of motorcycles that run on gasoline in cities and favoring electric vehicles when it comes to public procurement.
EV adoption is a component of a larger energy sector reform initiative in Ethiopia. A market-based exchange rate, steps to entice private investment in renewable energy generation, and a phased 400% increase in electricity tariffs by 2028 are important components.
Posted on : 08 Jul,2025 | News Source : ABNews
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