Ethiopia: Bumpy Road As Ethiopia Struggles With Electric Vehicle Revolution

Ethiopia this year became first country in the world to ban imports of petrol and diesel vehicles – marking a dramatic shift towards electric ones. The bold move aims to boost the economy and protect the environment, but it also faces significant challenges in a nation where only half the population has access to electricity.

Ethiopia’s reliance on fuel imports has been a drain on its economy. In 2023, the country spent over €5.5 billion on petrol and diesel imports, with more than half used for vehicles.

By banning fossil-fuelled cars – a move announced in February – the government hopes to cut this unsustainable expense.

Even diplomatic missions and NGOs aren’t exempt.

Despite Ethiopia’s limited infrastructure and access to electricity, the new rules are set to have a profound impact on the country’s economy and its carbon footprint.

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Prime Minister Ahmed, who won the Nobel Peace Prize in 2019, has long supported environmental causes.

Ethiopia has undertaken massive reforestation projects, aiming to plant five billion trees by the end of 2024.

The country also has plenty of green energy, especially hydropower, thanks to large projects like the Grand Ethiopian Renaissance Dam.

The switch to electric vehicles fits with Ethiopia’s wider environmental strategy, positioning it as a leader in Africa’s fight against climate change.

It will help reduce carbon emissions from transport, which has been a big source of air pollution in cities like the capital, Addis Ababa.

But there’s another important reason for the change: saving money.

“Ethiopia has been struggling for over a decade to increase its foreign currency generation,” Ethiopian business and economics expert Samson Berhane told RFI.

By cutting imports – especially those seen as “unnecessary” – the government will have extra foreign cash.

This move could have an economic boost for Ethiopia, which spends a lot of its foreign currency on importing fuel.

Berhane also points out that car ownership in Ethiopia is quite low.

“For a population of 130 million, there are not even 1.5 million vehicles in the country,” he says. “Only 70 percent are private vehicles, while 90 percent of those private cars are in Addis Ababa.”

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Infrastructure hurdles

A lack of charging stations makes long-distance travel nearly impossible for EV drivers, while frequent power cuts coumpound the problem.

One of the most glaring issues is the lack of infrastructure to support EV adoption. As of this year, there is only one public charging station in the entire country, located in the capital.

There are only two specialised garages capable of servicing electric vehicles, and spare parts are difficult to come by.

These infrastructure problems are a major obstacle to the government’s plan to import 400,000 electric vehicles by 2030.

“People don’t have the confidence to buy electric cars”, Berhane says.

Another challenge is the high cost of electric vehicles. Even with lower import taxes, electric cars in Ethiopia are too expensive for most people.

A second-hand electric vehicle can cost over €32,000, while new models range from €35,000 to €100,000.

“When [Ethiopians] buy a car, they ask themselves whether they will be able to resell it,” Berhane says. “Once you buy an electric car, its value will decrease.”

As a result, electric vehicles remain out of reach for most Ethiopians, limiting the impact of the government’s policy to wealthier people.

Looking Ahead

Ethiopia’s electric vehicle ban is a bold and risky move that reflects both the country’s urgent economic needs and its environmental goals.

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While the switch to electric vehicles offers clear benefits in reducing fuel imports and cutting emissions, the government needs to tackle big infrastructure and affordability challenges to make it work.

“The majority of the Ethiopian population haven’t reached to a point where they can say that they want to use fuel-powered cars instead of electric cars, because 95 percent of the population still cannot afford to buy a car,” Berhane says.

“More than 75 percent of the population lives in rural areas. So [they are not] concerned whether the country bans fuel-powered cars or not.

If these hurdles can be overcome, Ethiopia could become a leader in electric transport, setting an example for other developing countries looking to reduce their dependence on fossil fuels and embrace cleaner energy solutions.

For now, though, the road ahead is full of challenges. Ethiopia’s electric vehicle revolution is just beginning, and it’s not yet clear if the country’s ambitious goals will be achieved.

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