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Lessons from the region to drive the shift

Special Reports

Lessons from the region to drive the shift

Friday July 28 2023

An electric car on display during a sustainable energy expo in Nairobi last year. FILE PHOTO | NMG

In March, a report on e-mobility showed that adoption of electric vehicles (EVs) was gaining ground in Tanzania faster than in any other East African country, with an estimated 5,000 vehicles on its roads.

The findings of Africa E-Mobility Alliance report surprised observers on incentives to importers and users of electric vehicles in Tanzania against her EAC neighbours.

Similar to Kenya, Tanzania imposes high import taxes on EVs and has limited funding to the sub-sector, few technicians in the space, low electricity grid access and limited consumer knowledge.

As at February, at least 10 firms in the country were involved in the importation, selling, retrofitting, servicing and charging of electric vehicles.

While Tanzania’s record on the e-mobility transition may be disputed, few can question Rwanda’s bold steps towards the EV switch.

Unlike its neighbours —Kenya, Tanzania and Uganda — Rwanda has a national EV policy represented by the Green Growth and Climate Resilience Strategy.

It is developing a national sustainable mobility policy to facilitate the transition, including curiously- improving the efficiency of internal combustion engines by reducing their emissions per kilometre.

Rwanda has been attracting e-mobility investments and is already home to Volkswagen Mobility Solutions, Victoria Autofast Rwanda, Ampersand and Gura Ride, all having notable investments into EVs and e-motorbikes.

The country has offered more incentives than its closest regional peers to facilitate the transition.

The initiatives include low charging costs from an EV-centred electricity tariff and tax breaks on EVs, spare parts, batteries and charging station equipment which is exempt from import, excise duties and VAT.

Over and above the tax breaks, Rwanda is offering land to companies setting up charging stations on a rent free basis.

Firms manufacturing and assembling EVs are enjoying a 15 percent corporate income tax rate and tax holidays.

Beyond direct interventions on EVs, Rwanda is also working on the expansion and enhancement of public transport networks with the targeted new public transport system centred on increasing the use of technology, improving route planning and fostering a better vehicle mix.

Without a comprehensive e-mobility national policy, Kenya may lag Rwanda in the transition to EVs, according to experts.

“Even with recent tax proposals that featured several incentives on e-mobility, Kenya’s policy is yet to be coherent with the proposals so far lacking anchoring in specific policies. A coherent policy will be important for co-ordination,” said Andrew Amadi, the CEO of the Kenya Renewable Energy Association (Kerea).

Mr Amadi sees e-mobility as integral to reducing the country’s reliance on petroleum that could allow it to save on forex exchange—given that fuel imports make up roughly a fifth of its annual import costs.

The setting up of a national e-mobility policy is expected to galvanise interest in the e-mobility industry and subsequently result in more private sector-led investments.

“People are ready to move but are apprehensive of policy,” he added.

In Uganda, President Yoweri Museveni is targeting forex savings just like his peers in the region.

Uganda is engaging private e-mobility operators and international development partners to explore ways of transitioning to greater use of EVs.

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