By pulling the plug on petrol, the East African country has sparked a continent-wide conversation on energy, economy, and the electric road ahead.
By Ethical Business Analysis Desk
When Ethiopia quietly issued a directive last year banning the import of all internal combustion engine (ICE) vehicles, the world barely blinked. Yet this was no half-hearted climate pledge. This was immediate, absolute, and global-first. No more new petrol or diesel cars, not next decade, not five years from now. Ethiopia became the first country on earth to say: “From now on, it’s electric only.”
The motivations were not just environmental idealism. As Ethical Business confirmed through Ministry of Finance documentation, Ethiopia had been bleeding over US$5 billion annually on fossil fuel imports – a figure that threatened not just economic stability but energy sovereignty. That huge foreign currency outflow became the trigger for action.
A senior source at Ethiopia’s Ministry of Industry, referencing the letter dated May 7, 2017 (in Ethiopia’s calendar, corresponding to May 2025 globally), confirmed the country had gone even further — now banning not just fully built ICE vehicles, but also semi-knockdown (SKD) and completely knockdown (CKD) kits used for local assembly. The only exceptions were for ambulances and hybrid or electric-powered models. For many in the local industry, this marked a dramatic pivot. The government, which had previously supported local ICE vehicle assemblers, was now betting big on electrics.
But how does a low-income country with limited EV infrastructure leapfrog into full-blown electrification?
Power from within: Hydropower fuels the EV shift
Enter the Grand Ethiopian Renaissance Dam (GERD) – the continent’s largest hydroelectric power project. The first units of the 5,150 MW mega-dam have come online, adding an estimated 15,500 GWh of clean electricity annually. Speaking to Ethical Business, Sarah Assefa, an Addis-based climate journalist tracking Ethiopia’s EV rollout, emphasized, “GERD isn’t just a dam – it is the beating heart of Ethiopia’s clean energy future. The government saw the logic: Why burn imported fuel when you can drive on domestically generated hydropower?”
And that is exactly what is happening. One only needs to look at Ethio Telecom’s flagship EV charging station on the Bole–Megenagna road in Addis Ababa to understand the momentum. This high-tech hub features 8 ultra-fast chargers (600 kW), 12 super-fast chargers (500 kW), and several smart pole Level II chargers for emergency top-ups. In just two months, from February 11 to early April 2025, the hub serviced 14,280 charging sessions and dispensed over 376,000 kWh of electricity. Ethio Telecom estimates this avoided 521,074 kg of CO₂ emissions, the equivalent of planting over 2,600 trees.
“It’s hard to overstate how symbolic this charging station has become,” Assefa adds.
“It’s sleek, efficient, and jam-packed on weekends. It’s become a billboard for Ethiopia’s electric future.”
Riding the EV wave
Ethiopia’s target is clear: 500,000 EVs by 2030. Already, tens of thousands of electric vehicles are navigating Addis streets -not only for personal use, but also in logistics, ride-hailing, and even informal taxi sectors. While no one’s pretending the transition is smooth – upfront costs, resale uncertainty, and spare parts shortages are real concerns – the government is doubling down. A phased removal of fuel subsidies, and the introduction of 15% VAT and excise on fuel, is further tipping the balance away from ICE vehicles.
The International Energy Agency (IEA) backs this shift in its Global EV Outlook 2025, noting that Africa’s transport sector is responsible for 24% of its carbon dioxide emissions from fuel combustion. Reducing this footprint isn’t just environmental stewardship; it is about survival. According to the United Nations Environment Programme, a shift to cleaner energy and transport could save up to 200,000 lives a year by 2030, rising to 880,000 annually by 2063, while slashing CO₂ emissions by 55% and methane by 74%.
Will other countries follow?
Across the continent, some are starting to. Rwanda now allows only electric motorcycles to be registered. In Kenya, 7.1% of all new motorcycles in 2024 were electric. In Senegal, a fully electric Bus Rapid Transit (BRT) system has already begun operations – a first in West Africa. Zimbabwe has reduced import duties on EVs from 40% to 25%, while keeping ICE duties unchanged, and Zambia and Mauritius have removed EV taxes altogether.
But elsewhere, the picture is mixed. South Africa, despite having Africa’s largest car market, still charges higher import duties on EVs than ICE vehicles – a major barrier to adoption.
Chinese automakers see this landscape as an opportunity.
China: Driving the continent’s EV boom
Speaking to China Daily recently, Steve Chang, General Manager of BYD South Africa, shared the company’s plans to triple its dealership network in the country to 30–35 locations by 2026.
“We’re implementing a hybrid and electric dual powertrain strategy,” he noted, with six models already on sale in South Africa and more coming to East Africa.
In Kenya, BYD is partnering with BasiGo, a Nairobi-based EV bus company, to assemble electric buses locally. Over in Egypt, BAIC and Alkan Auto are launching a new EV plant targeting 50,000 units annually for Africa’s market.
As Dennis Wakaba, a consultant at the Electric Mobility Association of Kenya, was quoted as saying that, “Chinese EV brands are reshaping the market – they’re affordable, well-built, and tech-savvy. That’s what Africa needs.” Wakaba also emphasised the need for local assembly and battery infrastructure to bring costs down and create jobs.
Stephen Dyer, Managing Director at AlixPartners, agrees.
“Africa is still a small automotive market today, but the long-term growth potential is huge,” he said. “Chinese brands dominate global EV production, and they’re also leading in autonomous driving tech, battery efficiency, and vehicle software. Their smart features and affordability make them ideal for African consumers.”
According to the IEA, electric car sales in Africa more than doubled in 2024, reaching around 11,000 units – but that is still less than 1% of all car sales on the continent. Without charging networks and policy support, growth will remain slow. But Ethiopia is proving that determined leadership can change the game.
Ethiopia’s case study for a continent in transition
Ethiopia’s approach may not be perfect. Critics point to affordability, lack of local EV supply chains, and the challenge of rural access. But few can argue with the boldness of its strategy. It is not waiting for global automakers to decide Africa’s future – it is defining its own.
As Assefa reflects, “What Ethiopia has done isn’t just policy – it is a statement. If a country with limited resources can lead the world in banning fossil fuel cars, what excuse do the rest of us have?”
Reporting by the Ethical Business team in collaboration with Sarah Assefa (Addis Ababa), China Daily, International Energy Agency, United Nations Environment Programme, Electric Mobility Association of Kenya, and AlixPartners.
