Electric cars are becoming more and more common every day, but in most countries they are far from becoming the norm. One country seems to be aiming to change this by implementing a ban on the import of cars with gasoline or diesel engines, which will force its population to choose electric vehicles as their mode of transportation if they want to purchase a new vehicle. This country is Ethiopia.
Whilst probably not the country most people would jump to when discussing these types of regulation, the African country passed this law in January of last year, and the measure, one year in, seems to be working just fine. Yizengaw Yitayih climate expert form the country’s Ministry of Transport and Logistics explained to the French newspaper Le Monde that this measure was primarily though of as an economic measure and the main goal was to manage foreign exchange reserves more efficiently.
Ethiopia, home to about 120 million people, has been struggling with a severe shortage of foreign currency. In 2023 alone, the country spent over €6 billion on gasoline and diesel imports. By reducing its dependence on these imports, the government hopes to ease this economic pressure.
The change was never expected to happen overnight, as when the country announced the policy there were only around 100,000 electric vehicles in Ethiopia. However, the government is aiming for a massive increase, targeting nearly 500,000 electric vehicles on the roads by 2030, as reported by CNN. To achieve this, the government has implemented other policies to make the purchase feasible for residents. Before the import ban, the tax on combustion engine vehicles was of 200%, which made purchasing cars difficult for most people in the country, but this tax is not applied to electric vehicles.
In 2022 a new law was introduced giving tax breaks to those who purchased electric vehicles. According to the Ministry of Finance, completely dismantled EVs imported for assembly in Ethiopia are exempt from customs duties, excise taxes, VAT, and surcharges. For partially assembled EVs, only a 5% customs duty applies, with no additional taxes. Fully assembled EVs face a 15% customs duty but are also free from other taxes.
The problem with purchasing an electric vehicle in Ethiopia
While favorable tax policies made many eager to finally purchase a vehicle, these models are still expensive, costing sometimes above $20,000 and making them inaccessible to large portions of the population. Economist Samson Berhane, based in Addis Ababa, highlighted the challenges in an interview with VOA News: “Very few people are willing to take the risk of buying electric cars because of the lack of infrastructure, the shortage of skilled mechanics for EV maintenance, and the flood of Chinese brands with questionable long-term reliability.”
The problems do not end there, because of the rapid expansion of purchases, the country still does not have a lot of cars, just an average of 1 car per every 100 people, and this makes the infrastructure needed to charge electric vehicles and repair them almost nonexistent.
Mechanics specializing in EV repairs are overwhelmed. VOA News spoke with some professionals who admitted that the demand far exceeds their capacity. Yonas Tadelle, a mechanic in the capital, shared: “There are only two or three workshops that can repair new-energy vehicles in Ethiopia. Many customers don’t know how to maintain them, and we, as mechanics, lack the tools, spare parts, and expertise to fix these cars.”
As a result, EVs often sit for weeks in parking lots, waiting for spare parts to arrive from China or for mechanics to find the time and resources to fix them. But the government seems committed to fixing the issues, and while only time will tell whether or not the measure was a good idea for the country, it is a very nice case study that may help foresee what will happen if the European Union holds fast on their intention of implementing this same rule in 2035.
