Rwanda dangles incentives for EV charging investors

From the newsletter

Electric vehicle charging station providers will benefit from incentives such as rent-free land, tax exemptions on equipment and subsidised electricity as part of a plan by Rwanda to attract investors. Rwanda’s masterplan has identified 224 potential sites for EV charging stations across the country to serve the growing number of EV owners.    

• There are less than 30 public charging stations in Rwanda, which has a population of 14 million. The country plans to have a charging station every 50 km through additional investment from charging firms.  

• Rwanda’s low EV count however means it will be difficult to attract charging station companies, who incur huge expenses to set up the facilities. The East African country had only 512 fully electric cars and 6,660 hybrid vehicles registered in 2024. 

More details

• Rwanda’s plan also includes leveraging existing petrol stations and commercial buildings for charging station development. Building charging stations is a costly affair, which means development of new stations often takes time.

• The average setup cost of establishing AC charging stations is about $21,000 per station in Africa, while that of DC fast charging stations range from $50,000 to over $200,000 per station, depending on factors like location, equipment, and power capacity.

• The lack of sufficient charging stations has been detrimental to the uptake of EVs in Africa. Taxi operators who use EVs for instance have to limit their operations within certain geographical confines due to range limits. This limits their daily earnings, discouraging other motorists from switching to EVs.

• Rwanda has been at the forefront of promoting EVs, with a number of tax incentives and a stable economic environment serving as a solid base for companies like Ampersand, BasiGo, and Kabisa which sell electric motorcycles, buses and cars respectively in the East African country.

• Currently, EVs, spare parts, batteries and charging station equipment are exempted from import and excise duties and zero rated for Value Added Tax. Companies manufacturing and assembling electric vehicles in Rwanda can now also enjoy a 15% Corporate Income Tax rate and tax holiday.

• Despite this, several challenges still plague EV investors and users in Rwanda, derailing the transition to electric mobility. The main ones are limited charging infrastructure, high upfront costs, and reliance on imported technologies. Additionally, concerns about the reliability of the electricity grid and public awareness about EVs also pose obstacles. 

Our take

• While Rwanda is offering compelling incentives to attract investors, its low population size, which means the number of fully electric vehicles is low, makes it challenging for companies to justify the high setup costs. 

• The setup costs for charging stations are significant, making rapid deployment difficult. Utilising existing petrol stations and commercial buildings for charging is a strategic move, but scaling this model will require sustained investment.

• While Rwanda’s tax incentives and stable economic environment support growth, additional hurdles like reliance on imported technology and concerns about grid reliability, continue to slow adoption. Addressing these will be essential for a thriving EV ecosystem.