Ethiopia goes EV only — can they pull it off?

Caution! High Voltage ⚡️

…a decision has been made, that automobiles cannot enter Ethiopia unless they are electric ones.

— Alemu Sime, the Ethiopian Minister for Transport and Logistics

Sime is not talking about 2035. Or even 2030. He is talking about today. (link)

Due to a mix of different variables, ranging from the foreign exchange shortage which causes problems importing oil, to the massive air pollution in its cities due to a 20-something year old car fleet, the country decided to become the first in the world to just do it ✓. Ban ICE sales.

According to the Minister, Ethiopia spent €6 billion ($7.6B) on gas and diesel imports in 2023, necessitating the ban.

Note that we don’t have too many details to go on yet, so we can’t be sure if the ban remains permanent or not, and if it also expands to used cars.

Now all they need to do is build out the charging infra better, which Sime said the government is focused on, and the ~2M vehicles currently on its roads should be gradually switched out by something much cleaner.

Some support: The Ethiopian government also implemented electric car exemptions for VAT, excise tax, and surtaxes in 2022. The gov’s 10-year plan (found the 86-page pdf) sees it supporting the import of at least 4,800 electric buses and 152,800 electric cars to the country by 2030.

There’s a little something else that Ethiopia has to deal with for the transition, too.

“Ethiopia is rich in renewable energy resources, but citizens are energy poor,”

says a recent research paper I found to better understand their energy systems in place (link). I’d say Ethiopia has to overcome a barrier first, which most of us don’t have:

“Like millions in the global south, Ethiopians are energy poor with per capita electricity consumption of 100 kWh per year, far below the sub-Saharan Africa average of 487 kWh. Around 50% of Ethiopians, or 60 million people, have no access to electricity.”

And of those with access to electricity, can you imagine how much different the energy consumption will be with an EV, if your average electricity consumption per year is 100kWh? That’s about two full charges worth for an average EV.

The country seems to be going through a massive transition in energy with new renewable projects coming online — one of which is the 6000MW Grand Ethiopian Renaissance Dam (GERD) hydroelectric power plant that just opened, and once reaching full capacity would be the largest such in all of Africa.

Per Statista, Ethiopia had the second-least expensive household electricity prices worldwide in June 2023, at an average of $0.006/kWh. Now I’d happily charge mine with that.

My speculation: if the EV transition in Ethiopia is indeed strong underway, we’ll see the market flooded with Chinese EVs specifically. China is both the biggest supplier of foreign direct investment and the top bilateral creditor to Ethiopia, and President Xi Jinping upgraded ties last year. (link)

Oh, and the Chinese are roughly the only ones that can provide cheap-enough yet good-enough EVs to the country, with for example GWM and BYD already operating in nearby markets.

It will be interesting to watch how the country figures out the EV future. If you’re from the area and reading this (we are truly global here), please let me know and I’d love to figure out a way we could track this transition live.

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