electric vehicles

Electric Vehicles in Ethiopia: A Case of Putting the Cart Before the Horse

Globally, the manufacturing and use of electric vehicles (EVs) is growing as governments increasingly introduce stricter environmental protection directives. However, electric vehicles were not even a topic for discussion in Ethiopia until recently. The trend has shifted quite fast as a number of companies have started to assemble EVs despite the absence of appropriate legal framework to promote and regulate the assembly or manufacturing and use of the vehicles. The situation has left assemblers and users with obstacles. EBR’s Ashenafi Endale explores.

Thomas Gebremeskel, a medical doctor by profession, returned from USA 12 years ago. Thomas has dedicated his life to treating people. But five years ago, he encountered a life changing event while travelling to China to purchase medical equipment. Thomas saw physically handicapped people using electric cars. This is when the idea of establishing an electric vehicle assembly plant in Ethiopia came to him.

In 2017, he established Tom Electric Vehicles Manufacturing in Addis Ababa. Thus far, the company has assembled close to 2,500 EVs including automobiles, three wheelers, minibuses and motor bikes for handicapped people as well as others. The assembling capacity of the factory is 5,000 units per annum. The company assembles 20 models of EVs. Tom plans to sale 100,000 Evs in the coming ten years to cut the emission of 1.6ml tons of CO2.

“Our consumers include handicapped people as well as low- and middle-income farmers,” Thomas told EBR. “The demand for electric scooters and three wheelers has especially increased significantly in recent times.”

Marathon Motor Engineering is another company engaged in the assembly of EVs in Ethiopia. The company launched its first electric car model known as the Hyundai Ioniq last September in the presence of Prime Minister Abiy Ahmed (PhD). “The price of the EV assembled by Marathon is ETB2 million,” says Melkamu Assefa, Partner, and Managing Director of Marathon Motor Engineering. Since 2009, Marathon has been engaged in the import of Hyundai cars. In 2019, it established a fuel engine car assembling plant with an annual capacity of 10,000 cars by partnering with Hyundai Motors.

Although it is a recent phenomenon in Ethiopia, it has been more than a decade since the developed world started to manufacture and use EVs. Currently, there are five million EVs in operation globally. Out of the total, 39Pct are operating in China while 46Pct are functioning in Europe and the USA. Especially in recent years, the popularity of EVs has grown globally due to environmental and sustainability concerns.

“My vision is to replace at least 10Pct of fuel engine cars by EVs in 2025 and 20Pct by 2030,” stated Thomas. Currently, there are 1.2 million cars in Ethiopia, including construction vehicles, motor bikes, and three wheelers.
Despite the potential, EV assemblers are facing major difficulties in Ethiopia. Primarily, a legal framework for the assembly and use of EVs is absent in Ethiopia. While EV assemblers lament the absence of incentive packages and charging stations, among others, users grumble at transport offices denying them license and registration documents and traffic police confiscating their EVs and even imprisoning them.

“Our future is uncertain unless the government introduces conducive policies and adopts EVs officially,” noted Bereket Tesfaye, Deputy General Manager of Tom Electric Vehicles. Sources have told EBR that the government has banned driving EVs assembled by a number of local companies.

The Ministry of Transport (MoT) has been dragging its feet due to the absence of expertise at the Ministry, although it has established a department to oversee electric mobility and hired consultants for general advice on renewable energy use in the transport sector.

Mitiku Asmare, Deputy Director General of the Federal Transport Authority (FTA), admits the grim realities EV assemblers and users are facing. “Existing laws in Ethiopia are an obstacle. There are fundamental problems in this sector, despite its importance for Ethiopia.”

The main challenges of the transport sector in Ethiopia are congestion, accidents, pollution, and of course, the gap left by high demand and low supply, according to Mitiku. “EVs can solve these problems. But there are a number of drawbacks to this end,” explained the Deputy Director General. “Absence of skilled manpower, lack of incentives, and access to foreign currency are some of the obstacles.”

Bereket underscored that the government is not even willing to include EVs in the recently launched ten-year economic plan. “The government is currently talking about EVs. But this does not serve anything unless it is included in policies and strategies.” The National Transport Policy designed for the next ten years does not include EVs as well.

Fekadu Girma, Founder and General Manager of Belayab Motors, argues it is not feasible to start assembling EVs before securing governmental support. “The government needs to work out how to embrace the technology at the national level. Ethiopia must first analyze where it wants the transport industry to go and synchronize it with the automotive and energy sectors.”

“The government plans to embrace EVs,” says Fitsumberhan Tsegaye, Advisor of green mobility at the MoT. Recently, the Ministry established a national EV council after Dagmawit Moges, Minister, conferred with assemblers. Insiders told EBR that the decision came following pressure from the Prime Minister. The council, which will have sub committees working with the MoT, will conduct studies shortly and craft an electric vehicles roadmap, according to Fitsumberhan.

“The council is useless,” stated an expert close to the issue who spoke to EBR on condition of anonymity, due to the sensitivity of the issue. “The production, marketing, and use of EVs is not included in the ten-year economic plan. So, there can be no support.”

“The study will answer all our questions. Then the roadmap will determine how we will incentivize EV assemblers and importers,” said Abdissa Yadeta, director of the Federal Transport Authority (FTA).

The Authority is planning to procure 1,500 electric buses within the next ten years, to be deployed within the Bus Rapid Transit (BRT), which the Addis Ababa City Administration is preparing to build. “It will be done in a joint venture with foreign companies as they are now allowed to supply buses with 45 or more seats,” Abdissa told EBR.

Berhanu Gizaw (PhD), Technologist and Lecturer of industrial engineering at Addis Ababa University, remarked that EVs are ideal but the government needs to undertake research to adapt the technology to specific local scenarios. “This will aid the development of proper human capital, provide support, and regulate electric mobility.” EBR


9th Year • Oct 16 – Nov 15 2020 • No. 91

Ashenafi Endale


Leave a Reply

Your email address will not be published. Required fields are marked *


About us

Ethiopian Business Review is first class and high quality monthly business magazine.


CONTACT US

CALL US ANYTIME



Latest posts



Newsletter