Here is why Tanzania is attracting new EV firms

From the newsletter 

Chinese electric motorcycle company TankVolt has entered the Tanzanian market. TankVolt follows Spiro, a leading electric motorcycle company, and Alpha E-Mobility, a Canadian electric tri-cycle company, among the EV firms that have launched in the market this year. They are set to battle for customers with local companies like Green Wheels, TRi, and eMo Mobility.

• Intensifying competition comes as electric two- and three-wheelers, used as an affordable means to transport people and goods, are gaining popularity in Dar Es Salaam, Dodoma and Arusha.  

• EV companies that successfully tested their business models in Kenya and Uganda are viewing Tanzania as the next growth opportunity in East Africa. With nearly 70 million people, Tanzania is the fifth most populous country in Africa.

More details

• TankVolt is the electric mobility subsidiary of Transsion Holdings, a Chinese company that dominates Africa’s mobile phones markets with popular brands such as Infinix, Tecno and Itel and electronics with Syinix. The company made its debut in Africa in 2023 when it launched in Uganda. It has since expanded to Nigeria, Kenya, Tanzania, and Ethiopia.

• The company has begun recruiting staff in Tanzania following its entry into the East African country. TankVolt currently manufactures its own electric motorcycle components in China and ships them to its markets in Africa for assembly. It recently started production in Kenya, one of its key markets.

• “It depends on business progress,” TankVolt General Manager Alex Ding told Mobility Rising when asked about the company’s immediate expansion plans into other markets following its entry into Tanzania. The firm’s biggest presence is in East Africa, and future expansion will likely start with other countries in the region. 

• The entry of new companies like TankVolt, Spiro and Alpha E-Mobility is expected to stimulate Tanzania’s EV market, which is still tiny despite the country’s huge population. There are an estimated 5,000 EVs in Tanzania, but the majority are two-wheelers and three-wheelers. Electric cars remain scarce, mainly due to their high prices. 

• The Tanzanian government has rolled out a number of incentives to attract new investment in the sector, which promises to create thousands of new jobs and lower transportation costs. In 2021, the country eliminated excise duties on electric cars, motorcycles, and three-wheelers. Tanzania also offers reduced import duties and VAT exemptions for EVs, while it last month approved a one-year duty remission on lithium-ion battery accumulators used in manufacturing EVs. 

• EVs however face stiff competition from Compressed Natural Gas (CNG) vehicles in Tanzania, slowing down adoption. Tanzania has abundant local natural gas reserves, making CNG fuel cheaper than petrol and diesel for consumers and businesses. The number of CNG vehicles and filling stations is growing, with plans to convert most vehicles by 2050. 

Our take

• TankVolt's entry, backed by the financial and logistical power of Transsion Holdings, will escalate competition. This, combined with the presence of other new and existing players, will stimulate the market. 

• The company’s model of manufacturing components in China and assembling them in Africa, as seen in Kenya, suggests they will likely establish a similar assembly plant in Tanzania. This move, along with similar efforts by companies like TRi and Spiro, will be crucial to cutting costs. 

• The competition between EVs and CNG vehicles could lead to a two-pronged approach for many consumers, with some opting for CNG for its immediate cost benefits and others choosing EVs for their long-term environmental and running cost advantages. The future of the Tanzanian transportation market will likely be a mix of both technologies.