China’s Neta Auto targets EV assembly in Kenya

From the newsletter

Chinese electric vehicle manufacturer Neta Auto is planning to start assembly in Kenya. This will make it the first major electric car assembler in the East African country. Kenya currently assembles electric bicycles, motorcycles and buses. Neta is partnering with Kenyan EV dealer Moja EV, which distributes the firm’s EVs in the country, for the project. 

• Demand for electric cars in Kenya is rising, but the country relies on imports, mainly from China. Local assembly could reduce the cost of electric cars, as semi or completely knocked-down components attract lower taxes than fully built cars.

• If Neta Auto is successful, it could prompt other major global EV manufacturers to do local assembly in the country. This will however not happen overnight, as Kenya’s – and Africa’s - EV market is still small compared to global markets. 

More details

• Moja EV, which also supplies other Chinese-made EVs like Skyworth, will lead the assembly project in Kenya. The company will first assemble automobiles through a cooperation with Associated Vehicle Assemblers Ltd., based in Mombasa.

• Currently, Moja EV imports fully built Chinese EVs, mainly Neta V. Eventually, the company intends to open a factory of its own to locally assemble solar and battery components. The project enhances the nation's position as a possible East African hub for EV assembly and distribution.

• As operations increase, Moja EV expects to produce about 300 vehicles each month and 1,500 vehicles annually. The company plans to cut prices for both local and regional clients by building cars in Kenya and avoiding higher import duties.

• Kenya's EV assembly sector is gaining momentum, with local companies moving towards production to reduce costs and expand market reach. Private firms like Spiro and Roam have taken the lead in local assembly of electric motorcycles, while the latter, in addition to BasiGo, make electric buses. 

• The project has potential to create much-needed jobs in Kenya’s manufacturing sector whose contribution to the country’s economy has been shrinking for more than a decade. It could also serve as a blueprint for other firms who are seeking to begin local assembly of their own as demand grows. 

• Demand for EVs in Kenya is projected to continue its rapid growth trajectory to support local assembly and manufacturing. The number of registered EVs in Kenya doubled in 2024, reaching 5,294 units, with motorcycles leading the adoption.

• EV assembly in Africa is gaining traction, with several countries such as Kenya, South Africa, Morocco, Egypt, Nigeria and Rwanda making strides toward local production to reduce costs and boost adoption. Many African countries impose heavy taxes on imported EVs, making local assembly a cost-effective alternative. 

Our take

• Local assembly of EVs is a positive development for Kenya, but the country’s unpredictable tax environment, which often sees tax rates adjusted annually through Finance Acts, could deter further investment. 

• The majority of EVs on African roads are imported. But local assembly could lead to production of vehicles that are well tailored for the needs of the African market, which could boost adoption in the long term.  

• Importing EV components, especially batteries, remains expensive. Limited local supply chains increase reliance on foreign manufacturers. Solving this could make Africa’s EV assembly ecosystem more resilient to global shocks.