Ethiopia's EV boom as fuel ban sparks growth and innovation

Ethiopia has set a remarkable milestone in the global push towards sustainable transportation by becoming the first country to ban the import of fuel-powered vehicles in January 2024. The move, aimed at promoting electric vehicles (EVs) and reducing carbon emissions, has sparked a remarkable boom in the Ethiopian EV sector. To delve into the implications of this groundbreaking policy and the future landscape of e-mobility in Ethiopia, CNBC Africa's Tabitha Muthoni interviewed Hilina Legesse, Vice President & Head of Corporate Services at Dodai and President of the Addis Ababa E-Mobility Association. Legesse emphasized the profound impact of the ban on internal combustion engine (ICE) vehicles, noting a significant surge in the number of EVs on Ethiopian roads throughout the year. The ban has not only encouraged the proliferation of EV manufacturers in the Ethiopian market but also prompted the government to introduce lucrative tax incentives for EV importers. Previously, the import duty on ICE vehicles stood at a staggering 300%, whereas EVs now enjoy a duty-free status, offering substantial incentives for stakeholders venturing into the EV sector. Furthermore, Ethiopia's renewable energy hub status has attracted notable investments and partnerships, exemplified by collaborations with industry giants like BYD and Moenko. Legesse highlighted the influx of international EV companies eyeing Ethiopia as a burgeoning investment hub, buoyed by favorable government regulations and promising market potential. Despite the positive momentum, Legesse emphasized the importance of aligning government initiatives with practical implementation. She underscored the need for comprehensive education among stakeholders and efficient infrastructure development, particularly in establishing charging stations to support the growing EV market. Looking ahead to 2025, Legesse anticipates a more refined regulatory framework that will streamline investment processes and enhance the user experience for adopting e-mobility solutions in Ethiopia. Collaborative efforts between Dodai, the Ethiopian Investment Holdings, and governmental bodies are underway to establish over 100 battery swapping stations, catering to the evolving needs of gig workers embracing e-mobility services. With a visionary outlook for the future, Ethiopia positions itself as a prime destination for investors seeking to capitalize on the burgeoning e-mobility sector in Africa. The strategic initiatives and progressive policies set forth by the Ethiopian government are paving the way for a sustainable and eco-friendly transportation ecosystem in the nation.