According to data from the Ethiopian Energy Outlook 2025, electric vehicles (EVs) accounted for over 60 percent of newly registered personal cars in Ethiopia in 2024, signalling a significant change in the nation’s energy and transportation landscape.
Government’s policy to reduce reliance on imported petroleum products
The increase in EV adoption comes after a number of policy initiatives spearheaded by the government to encourage the use of Ethiopia’s renewable energy sources and lessen dependency on imported petroleum products.
The nation currently imports fossil fuels at a cost of more than $4 billion USD a year, placing a significant strain on its foreign exchange reserves.
EV in Ethiopia increased to 14000 in early
Over the past 12 months, Ethiopia’s fleet of electric vehicles has increased threefold, from 4,600 in early 2023 to roughly 14,000 in early 2025.
In 2022, 1.4 million vehicles were registered in Ethiopia, including 290,000 cars, with Addis Ababa accounting for the majority of new car purchases.
Incentives to facilitate EV adoption in Ethiopia
The government offers incentives, including complete exemptions from VAT, excise tax, and surtax for electric vehicles (EVs) and drastically lower customs duties, which are 0% for locally assembled completely knocked-down (CKD) units and five percent for semi-assembled vehicles.
At the same time, imports of internal combustion engine (ICE) vehicles are subject to limitations, such as the refusal of foreign exchange allocation.
Consequently, EVs now make up around 5 per cent of the nation’s automobile fleet and contribute 0.2 percent of its electricity consumption. 148,000 EVs are the goal the government has set for itself by 2030.
However, given the average of 20,000 new car registrations per year, reaching this goal might be difficult without additional adoption acceleration or changes in the car import market.
Construction of charging stations to accommodate EVs
The government has issued a directive for the construction of public charging infrastructure in order to accommodate the increasing number of EVs.
Every charging station must be linked to the distribution grid, and the market must determine electricity pricing.
Additionally, plans are underway to place charging stations 50–120 kilometres apart along major transportation corridors.
Challenges
In spite of these advancements, there are still issues. There is still a lack of infrastructure for EV maintenance, spare part availability, and public charging network deployment.
At the moment, all charging occurs at residences or places of business with private electricity access.
Concurrently, the government has implemented policy measures that impact two—and three-wheeled vehicles, such as prohibiting motorcycles that run on gasoline in urban areas and favouring electric vehicles for public procurement.
The transition to EVs is a component of a larger energy sector reform in Ethiopia, including attempts to draw private investment to renewable generation projects, a shift to a market-based exchange rate regime, and a phased 400 percent increase in electricity tariffs by 2028.