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Ethiopia’s ICE Vehicle Ban: A Bold Move or a Risky Gamble?

In January 2024, Ethiopia took a drastic measure – it became the first country in the world to ban the import of ICE vehicles, with the aim of reducing dependency on fuel imports and promoting sustainability. While this ambitious policy aligns with global climate goals, the country faces major challenges in building the infrastructure necessary to support the transition to electric mobility at scale.

Without significant future investment in EV charging networks and vital grid stability, the ban could create more problems than it solves.

One of the most pressing concerns is Ethiopia’s current lack of installed charging infrastructure. The country currently has just one public EV charging station (as of September 2024), which is insuffi cient to support widespread adoption of electric vehicles. With limited infrastructure, potential EV buyers face uncertainty about where and how they will be able to charge their vehicles. Furthermore, Ethiopia’s electricity grid struggles with reliability, with frequent outages and instability threatening the feasibility of a national EV rollout. The country relies heavily on hydropower, which is sustainable yet vulnerable to fluctuations due to droughts exacerbated by climate change and regional water politics, further complicating grid stability.

Another major challenge is the affordability of electric vehicles. While the Ethiopian government has lowered import taxes on EVs, the cost of purchasing one remains prohibitive for most consumers. A second-hand EV can cost over $35,000, while new models can range from €39,000 to €110,000, putting them out of reach for the vast majority of the population. There is also a glaring lack of maintenance infrastructure and spare parts availability, with many anecdotes concerning EVs sitting idle as owners struggle to fi nd necessary parts for repairs or suffi ciently trained mechanics. Some vehicle owners have expressed frustration, with reports of customers preferring to return to ICE cars due to the difficulties associated with maintaining an EV in Ethiopia – especially when factoring in depreciation and potential resale value.

Despite these challenges, Ethiopia’s policy could offer long-term benefits if the country can facilitate the appropriate strategic investment. The country currently spends over $6 billion annually on fuel imports, and reducing reliance on fossil fuels could ease the economic burden over time. Additionally, Ethiopia has some of the cheapest electricity tariffs globally – approximately $0.03 per kWh – despite signifi cant price increases in September 2024. This is a real advantage for consumers and businesses when considering the total cost of ownership (TCO) and running costs of EVs.

Ethiopia also has the potential to become a regional leader in EV production if it can develop local battery manufacturing and charging networks. However, without clear investment signals and immediate efforts to address the vast infrastructure shortcomings, the ban risks creating a black market for ICE vehicle imports and unenforceable regulatory penalties and fines, as consumers and businesses struggle to transition to electric transport.

Ethiopia’s ban on ICE vehicles is a bold, unprecedented, and in many ways surprising move, but its success depends entirely on whether the country can build the necessary charging infrastructure and improve energy reliability. While the policy sends a strong message about the country’s commitment to sustainable transport, its execution and private sector market reaction will determine whether Ethiopia emerges as a leader in EV adoption among large African countries or faces a policy failure with potentially severe economic consequences.

Reference List
https://www.statista.com/statistics/1391069/cheapest-residential-electricity-by-country-world/
https://www.lemonde.fr/en/le-monde-africa/article/2024/09/13/ethiopia-the-first-country-in-the-world-to-ban-the-import-of-gasoline-and-diesel-vehicles_6725856_124.html
https://apnews.com/article/ethiopia-electric-vehicles-transport-b9478a11aa57050e3ecb6908333f0fa2
https://africa-energy-portal.org/news/ethiopia-bumpy-road-ethiopia-struggles-electric-vehicle-revolution
https://www.eep.com.et/?news=ethiopia-is-notable-for-having-most-competitively-low-electricity-tariffs-in-africa
https://capitalethiopia.com/2024/09/09/eeu-announces-major-electricity-tariff-reform/
https://shega.co/news/electricity-costs-set-for-nearly-400-increase-by-2028

About the author

Daniel Barham
Project Manager | e-Mobility, Clean-Tech, Digital Media

Daniel Barham

A highly motivated and resourceful project manager with extensive experience in the e-Mobility and energy management-infrastructure space. Passionate about Clean-Tech, and determined to work with an organisation that actively contributes towards sustainable international development.