The federal government is eyeing the establishment of an industrial park dedicated to manufacturing electric vehicles (EVs) as part of its green transportation campaign and in a bid to cut down on fuel import costs.
An ‘Electric Vehicles Implementation Strategy’ obtained by The Reporter and authored by experts at the ministries of Transport & Logistics and Industry outlines ambitions to turn Ethiopia into an EV manufacturer by 2029.
The document proposes to “establish a purpose-built EV technology park, develop EV industrial parks or special economic zones in partnership with the private sector.”
The strategy envisions EV components, spare parts, and full-vehicle manufacturing using local raw materials, calling for the study of potential lithium deposits and the establishment of market linkages.
“Support[ing] domestic firms participating in the local supply chain to access investment financing, technical advice and business development assistance, product development support, research and development support, and access to technology and innovation,” are also on the agenda.
TilahunAbay, advisor to the Minister of Industry, argues the energy transition hinges on a vibrant EV tech manufacturing industry,
“EVs are a highly technology intensive sector. Many countries are accumulating their own technology through trial and error. To extract these technologies and develop its own bedrock for EV advancement, Ethiopia also needs its own approach. The current generation offers an opportunity, because it is attracted to AI, robotics, and advanced technology. It’s a good time to adapt,” said Tilahun.
He sees the establishment of an industrial park in partnership with the private sector as a crucial step, but concedes it will take time and effort to realize one.
“Who will design the EV park, how financing is mobilized, who will do what inside the park, how it matches with the country’s transport and energy transition and other national plans will be answered by the strategy,” said Tilahun.
Although Ethiopia began its green transport transition with an abrupt and opaque ban on the import of fuel-powered vehicles in 2024, the advisor says there is plenty left to do.
“For instance, Addis Ababa alone needs over 1,100 EV charging stations. Currently there are only around 100 to 150. This is very little. To expand, a separate dedicated electric line is required. EV owners also need better awareness to reduce maintenance costs,” said Tilahun.
More recently, the government enacted a ban on the import of components for locally assembled cars in a move the operators of more than 30 assembly plants have characterized as a death sentence.
Meanwhile, the Ministry of Transport and Logistics is preparing to introduce a policy that will effectively force old fuel-powered cars off the road. Officials cite environmental and health safety as the reasons behind their plans to introduce and enforce standards for vehicle emissions. Vehicles that do not meet the standards will be suspended permanently, and some will be recycled, according to officials.
Tilahun suggests even stricter measures to incentivize EV adoption, such as reserving parking lots to EVs only or levying toll fees on fuel-powered cars.
“In a bid to benefit from international climate financing schemes like carbon financing, Ethiopia must implement such strategies,” he said.
Ethiopia’s massive fuel import costs, registering at USD six billion in 2023, are an even more pressing issue, according to the document.
“This expenditure drains valuable national resources and contributes to foreign currency shortages. As Ethiopia gradually adopts electric vehicles, this massive fuel import expenditure could be significantly reduced,” reads the EV strategy.
It also lists perceived challenges on the road to EV adoption, including instability (domestic and global), lack of consumer confidence, absence of established disposal and recycling systems, and potential environmental issues from improper disposal.
Another glaring issue is the lack of electric infrastructure. Around half of the population still lacks reliable access to electricity, while the grid is prone to power outages and has limited capacity.
“This unreliable power supply can hinder the effective use and charging of EVs,” notes the document.
