Kenya raises EV count by almost half as demand surges

From the newsletter

The number of electric vehicles in Kenya rose by 41% to hit 5,294 units by the end of 2024, up from 3,753 in 2023, latest statistics released by the Kenyan government on Thursday show. This includes two-wheelers, three-wheelers, and four-wheelers. The growth cements Kenya’s position as one of the fastest growing EV markets in Africa. 

• Kenya has witnessed a rapid growth in EVs in recent years, mainly driven by the introduction of a special electric mobility tariff and a reduction in excise duty on electric vehicles from 20% to 10%. The East African country has also exempted fully electric cars from value-added tax, and has seen a quick expansion of its charging infrastructure. 

• This growth is expected to grow further as the cost of EVs, especially motorcycles, continues to drop. At the same time, the expected entry of cheaper electric cars such as the BYD Seagull is expected to drive demand. 

More details

• While Kenya’s EV market is still nascent, it is growing rapidly. This saw it power to the top of Africa’s ranking in the Mobility Rising Index which ranked the leading EV markets on the continent. Kenya’s high ranking was driven by a high number of EV jobs and events hosted over the last three months.

• The EV market in Kenya was relatively tiny until 2019, with limited options and infrastructure. By 2023, EV sales reached a record 2,694 units, marking a fivefold increase from the previous year. This growth was driven by affordability improvements and innovative financing options like pay-as-you-go mechanisms.

• The overwhelming number of EVs in Kenya are motorcycles, and demand is growing. This has attracted dozens of companies like Spiro, Roam, Zeno, Ampersand, ARC Ride and many others to fight for control of the market. What is attracting many to electric motorcycles is that they are cheaper to run than their petrol-powered counterparts, leading to significant cost savings. 

• But the East African country is not resting on its laurels and is putting in place several measures to sustain the rapid EV growth. Through the Kenya National Energy Efficiency and Conservation Strategy (2020) for instance, it has a target of achieving 5% electric imported vehicles annually.

• Further, Kenya is also currently undertaking a study to establish the end user tariff for public charging stations. This will ensure that customers get charged fair tariffs thereby encouraging consumption.

• Kenya is likely to extend this growth as the cost of EVs continues to decline. Companies like Spiro and Roam continue to build high capacity manufacturing and assembly lines, which are reducing costs. Further, global EV manufacturers like BYD are now building cheaper EV models to cater for the entry level market. This price drop is key in Africa, where the majority of people cannot afford vehicles. 

• Besides Kenya, other African countries, particularly South Africa, Uganda, Ghana, Morocco, Egypt, Rwanda and Ethiopia are making significant strides in electric mobility. The number of EVs in these countries has grown rapidly in recent years, supporting thousands of new jobs and attracting investment from across the world. 

Our take

• Kenya should sort out its frequent tax changes to make investors plan better for their businesses. For instance, the abandoned Finance Act of 2024 had major proposals for the EV sector, some which were positive but others were negative. We will likely see these tax proposals revived in the Finance Act of 2025. 

• Currently, charging station providers set their own user prices. Kenya's initiative to establish end-user tariffs for public charging stations will lay the groundwork for expanding infrastructure. As charging becomes more accessible and affordable, EV adoption across both urban and rural areas will increase.

• Price remains the single largest barrier to EV adoption in Kenya. But the price of electric cars has been declining steadily, significantly reducing the gap with fuel cars. This will drive further adoption, which could see electric cars command a larger share of EVs on Kenya’s roads in the coming years.