Ethiopia: Analysis – Skepticism, Higher Prices Drag Government’s Effort to Encourage Use of Evs in Ethiopia, As a New Directive Set to Tackle Infrastructure Issues

Addis Abeba — Electric Vehicles (EV) are slowly gaining momentum on the roads in Ethiopia’s capital Addis Abeba, as the government exempted them from value added tax and excise tax since September, to encourage importers and local assemblers as well as improve user affordability.

Yet, a new directive is on the way to regulate the use of EVs, according to Ministry of Transport and Logistics . The directive, which is expected to be ratified by the parliament in less than a month, is attentive to license for electric vehicle dealers, assemblers and EV related infrastructure developments, Kedilmagist Ibrahim, a director at the Ministry, said.

The directive, which is expected to be ratified by the parliament in less than a month, according to Kedilmagist, is attentive to license for electric vehicle dealers, assemblers and EV related infrastructure developments.

Despite government’s pro-EV policy, however, there are limited knowledge about electric cars in Ethiopia, leading to fear and skepticism over their usage, particularly battery durability and charging preferences.

Million Alem, an app hailing Ride taxi driver in Addis Abeba, told Addis Standard that, he “wouldn’t dare to use electric cars within the coming three years until they become popular and their pros and cons are known very well”.

“There are no charging stations everywhere like the petrol stations, and I can’t even travel wherever I want, especially outside of Addis Abeba” he said. Million also has concerns about power access in a city that is already facing frequent power outages.

Yohannes Getachew on the other hand, bought his Volkswagen ID.4 electric car just two and half months ago. He said, “EVs are comfortable compared to petrol vehicles”.

His only reservations are their limited range of kilometers due to access to charging stations. “I can’t easily find the charging stations unlike the [fuel stations], but, EVs are easy to drive at no cost for petroleum and other related expenses” he said.

According to Daniel Tadesse, auto mechanic and garage owner, most EVs have a battery life of maximum of 10 years and according to current estimation it may cost nearly half of the price of the car to replace.

The batteries can be charged at home or at charging stations with two charging preferences. Fast charging which takes 20 minutes can be done at charging stations, while slow charging can be done at home and it might take from 8 to 12 hours to fully charge.

According to Daniel, charging EV can be remotely controlled, and once fully charged most of these cars have a range of about 580 kilometers.

Daniel said, the biggest advantage of an electric vehicle is its green credential. Electric cars are 100 percent Eco-friendly as they run on electrically powered engines. In Addition there is no need to lubricate the engines, or any of the maintenance tasks usually associated with a gas engine vehicle, he added.

However, Daniel said electric vehicles are currently not dependable for long journeys in Ethiopia. “Electric charging stations are still in early development stages in Ethiopia. It would be difficult to travel with EV on a long journey. You might end up stuck in places with no electric charging stations” he noted.

As the technologies are new one might also face hardships finding spare parts, Daniel added.

Ethiopia is among countries massively investing on hydro electric power, and promoting the use of EVs is considered to result in essential cut on government’s expenditure of foreign currency to import. But for this to happen, Daniel said the government needs to expand charging stations involving private investors.

That is where the new directive comes in. Kedilmagist told Addis Standard that the new directive mandates importers the installation of at least two electric charging stations near their display location, while assembly companies are required to build minimum of four charging stations near their assembly plant.

According to Kedilmagist, there is also a plan to permit licenses for investors who want to build EV charging stations in and outside the capital, which will help expansion of EV charging stations and draw more users towards electric cars and in turn promote renewable energy.

Cognizant of additional power supply needs as the number of electric cars in the country increase, the Ethiopian Electric Power said it has prepared a plan and is working with ministry of Transport and Logistics to ensure there is reliable power supply for electric vehicles.

Yet, there is another significant factor impacting government’s intent to expand the use of electric cars, prices. Despite tax exemptions, prices for electric vehicles remain exorbitantly high in the country.

In Addis Abeba, Volkswagen ID.4 SUV 2022 model currently costs 5.7 million ETB ($106,000) threefold its price in Dubai, which is about $35,000.

While some users urge government regulated prices, importers who spoke to Addis Standard insist on free market approach, putting the blame of price imbalances on lack of foreign currency, which they acquire mostly from the black market at higher rates. AS

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