This bold move is critical to improving Ethiopia’s environmental and economic future and positions the country as a global leader.
The Electric Mobility Landscape in Ethiopia
Ethiopia’s transition to electric mobility is still in its early stages but shows great promise. Currently, the country has approximately 5,000 to 7,000 electric vehicles, including private cars, buses, and motorcycles (ETHIOPIAN BUSINESS REVIEW). The government initially targeted importing 148,000 electric cars and 48,555 electric buses by 2030. However, due to rising demand, this target has been revised to 439,000 electric vehicles by 2030 (ELECTRIVE). With a vehicle motorisation rate among the lowest globally, Ethiopia has the unique opportunity to leapfrog the internal combustion engine (ICE) stage and transition directly to electric mobility as motorisation rates increase.
Ethiopia’s Leadership in Africa
Ethiopia’s electric mobility policy is a game-changer for the country and the entire African continent. Rwanda, which plans to phase out internal combustion engine motorcycles in Kigali by 2025, is following suit. As these efforts multiply across Africa, Ethiopia’s leadership is a beacon for what could be the future for many emerging economies grappling with dependence on fossil fuel and used vehicle imports.
Ethiopia’s January 2024 ban on importing all gasoline and diesel vehicles is a historic move, setting a new standard for supply-side mandates globally. The country’s renewable energy potential, driven by its 90% hydropower-based electricity grid, allows it to charge EVs with clean, renewable energy, creating a compelling environmental case. In parallel, Rwanda’s 2025 plan to phase out ICE motorcycles in its target to electrify 20% of its public transport buses by 2030 (RWANDA DISPATCH), demonstrate how aggressive supply-side mandates can drive large-scale adoption of electric mobility. These two countries stand as the first in the world with such bold mandates, setting the stage for Africa’s leadership in electric transport.
Economic and Environmental Benefits
The economic and environmental advantages of Ethiopia’s transition to electric mobility are profound. Let’s break down the key elements:
Fuel Import Bill Reduction
Ethiopia’s fuel import bill was close to $6 billion (RFI) in 2023. This expenditure drains valuable national resources and contributes to foreign currency shortages. As Ethiopia gradually adopts electric vehicles (EVs), this massive fuel import expenditure could be significantly reduced.
Projected Economic Savings
Ethiopia can save on foreign currency by reducing reliance on imported fossil fuels. These savings could be reinvested into developing local industries, including EV manufacturing and servicing, creating a multiplier effect for the national economy. With these savings, the country can grow its green economy and boost investment in other sectors such as agriculture, technology, and renewable energy.
Environmental Benefits
The environmental impact of adopting electric mobility in Ethiopia cannot be overstated. The shift to EVs will significantly reduce tailpipe emissions, a major source of urban air pollution. According to the State of Global Air, in 2017, air pollution accounted for nearly 8% of deaths in Ethiopia, totalling approximately 41,000 premature deaths. Adopting electric vehicles will help mitigate these health impacts by significantly lowering emissions from ICE vehicles. In Addis Ababa, there were 2,700 premature deaths attributed to air pollution in 2017, with projections indicating this could rise to 6,000 by 2025 without intervention (ENVIRONMENTAL PROTECTION AGENCY).
Job Creation in Electric Mobility
While Ethiopia’s electric mobility sector is still nascent, it can potentially create thousands of jobs across various sectors. Employment opportunities in the electric mobility sector will span EV manufacturing, assembly, battery production, charging infrastructure development, and maintenance services. Ethiopia’s investment in its green economy could significantly reduce its youth unemployment, which stood at 27% in urban areas in 2022 (ULANDSSEKRETARIATET).
Lessons from Global and Regional Experiences
Norway
Norway’s success in electric vehicle adoption is driven by a combination of tax exemptions, free parking, and access to bus lanes, which make EVs highly attractive to consumers. Norway’s government has also invested heavily in charging infrastructure, with over 20,000 public charging points nationwide (ELECTREK).
China
In China, which has invested over $230 billion in EV infrastructure since 2009, over 2.7 million public charging stations will be operational by the end of 2023 (ROAD GENIUS). China’s market share of electric vehicles reached almost 40% of new car sales in 2023 (OUR WORLD IN DATA).
Brazil
In Brazil, the government is committed to integrating 2,600 electric buses into the city of São Paulo’s bus fleet by 2024 (PAN AMERICAN FINANCE). Projections indicate that Brazil will have over 6,800 public and semi-public charging stations by the end of 2024, expected to reach 10,000 by 2025 (POWER TO DRIVE SOUTH AMERICA).
India
India has also taken bold steps to foster EV adoption, including the PM E-DRIVE scheme, which was approved with a financial outlay of ₹10,900 crore (approximately $1.3 billion) to boost EV infrastructure and adoption (PRESS INFORMATION BUREAU). India aims to have 30% of new car sales be electric by 2030, up from less than 2% currently (REUTERS). The government plans to install over 22,000 EV chargers and 1,800 chargers for electric buses (PME DRIVE).
These countries’ experiences offer invaluable insights into how Ethiopia can build a robust EV ecosystem, combining policy framework, infrastructure investments, and electric bus program experiences to shape its transition.
Ethiopia and Rwanda leading the world
Rwanda’s proactive stance complements Ethiopia’s electric mobility efforts. In Rwanda, the phase-out of ICE motorcycles in Kigali by 2025 will create a cleaner, quieter, and more resilient urban transport system. Rwanda has already deployed approximately 3,500 electric motorcycles and plans to introduce 200 electric buses by the end of 2024 (GGGI).
These two countries are the first in the world with such ambitious supply-side mandates, and their efforts will likely be a model for the rest of the continent. Their leadership points to compelling economic and environmental propositions that the countries could not overlook.
Opportunities for Action
Renewable Energy Utilization
Ethiopia’s renewable energy, especially hydropower, makes it an ideal candidate for electric mobility. Once operational, the Grand Ethiopian Renaissance Dam (GERD) will add 5,150 megawatts (TRACTEBEL ENGIE), effectively doubling the country’s electricity production capacity and ensuring sufficient power to support the growing demand for electric vehicles. Ethiopia can avoid the environmental costs associated with fossil fuels by using its renewable energy to power its electric mobility transition.
Public-Private Partnerships
Public-private partnerships will be crucial for Ethiopia to scale its EV infrastructure. Private sector involvement is already beginning, with companies like Dodai and Marathon Motors focusing on local EV manufacturing and charging infrastructure. Ethiopia can also benefit from foreign investment and technical expertise to build a comprehensive EV ecosystem.
Local Manufacturing and Job Creation
All EVs are exempt from value-added tax (VAT), surtax, and excise tax. Completely knocked-down (CKD) kits for local assembly are exempt from customs duties, semi-knocked-down (SKD) kits incur a 5% customs duty, and fully built imported EVs face a 15% customs duty (CLEANTECHNICA). The growth of the EV sector could create thousands of jobs in assembly, battery production, charging infrastructure development, and maintenance. Ethiopia’s domestic industry could rival those of more established markets, focusing on reducing imports and promoting local production.
All plugs on deck!
Ethiopia’s electric mobility journey is not just about a single country; it’s about positioning Africa as a global leader in this climate transition. The potential for economic growth, environmental improvement, and job creation is immense. Now is the time for global policymakers, businesses, and individuals to rally behind this movement. Whether through investment, supporting policies, or exploring opportunities in the growing electric vehicle market, everyone has a role to play.
The journey towards electric mobility in Africa is only just beginning. Will you be a part of it?
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