E-mobility race heats up in East Africa with over $50m in startup cash

Monday April 17 2023

A BasiGo full electric passenger bus. FILE PHOTO | POOL


Kenya is widely considered a continental leader in technology and innovation but when it comes to electric mobility, Nairobi is lagging far behind its neighbours.

The African E-Mobility Alliance (AFEMA) estimates that 40 Kenyan e-mobility start-ups have so far raised $52 million in capital financing, the highest in Africa, yet there are only 350 electric vehicles on Kenyan roads as of March 2023.

In comparison, Tanzania currently has at least 5,000 electric vehicles yet it has only 11 e-mobility companies which so far have raised just about $1 million in investments.

Rwanda has about 900 EVs on its roads while Uganda which has nine companies that have raised $5 million, also miles ahead of Kenya in the e-mobility journey.

Uganda’s transformation has been steered by the state-owned Kiira Motors, which produced some of the first electric public service long-distance buses on the continent.

Read: Uganda's Kiira Motors in race against time


The Ugandan made Kiira. PHOTO | MORGAN MBABAZI

The AFEMA report notes that Tanzania is attractive to e-mobility firms because of the large size of its market and relatively low competition although barriers slowing adoption include high import taxes, unclear government policy, limited funding, too few technicians, low electricity grid access and limited consumer knowledge.

Globally, it is estimated that one in 250 cars on the road is electric which equals a global market share of around 2.2 percent.

According to the International Energy Agency (IEA), sales of EVs doubled in 2021 from the previous year to a new record of 6.6 million compared to just 120,000 sold worldwide in 2012, as nations raise to decarbonise road transport, which accounts for 16 percent of global emissions.

Kenya’s efforts

Until recently, the e-mobility journey in Kenya has been steered by the private-sector unlike in Tanzania, Rwanda and Uganda where government has played a central role.

But the state has been making deals and concessions and giving incentives to accelerate uptake of electric vehicles as it aims to increase the number of electric vehicles on its roads to at least 104,000 or five percent of all vehicles by 2025, in a bid to reduce greenhouse gas emissions and improve on road transport efficiency.

Read: Kenya secures $377m for electric bus lane

The Kenyan government through the country’s Finance Bill of 2019 reduced excise duty for EVs from 20 percent to 10 percent and the Kenya Bureau of Standards (Kebs) has developed and adopted standards that apply to electric vehicles imports. Up to 24 standards have been developed and adopted, covering specifications and testing procedures for safety, performance and power consumption.

In a visit to Brussels in March, President William Ruto closed a deal with the European Union, European Investment Bank (EIB), and the French Development Agency (AFD), which will see them support the construction of a dedicated electric bus lane in Nairobi.

In the deal, the EU will grant $49 million (Ksh6.6 billion), the EIB and AFD will jointly give $257 million (Ksh34.6 billion), while the Kenyan government will contribute Ksh9.69 billion ($72 million) for the Bus Rapid Transport (BRT) lane. Kenya’s energy agencies have also stepped up construction of and support for EV charging infrastructure in similar efforts.

Bus Rapid Transit.

The ongoing construction of the Bus Rapid Transit system (BRT) along Thika Road, Nairobi, on June 15, 2021. PHOTO | FILE | NMG

In the latest review of electricity tariffs that raised the cost of power, the Energy and Petroleum Regulatory Authority (Epra) set a “special tariff” for EV charging “to support e-mobility”.

Also, the state-owned electricity retailer Kenya Power last year said it has started phasing out fossil fuel vehicles in favour of electric ones as a demonstration of its commitment to “substantially reduce its carbon footprint.”

In piloting the transition, Kenya Power said it will be spending Ksh44.57 million ($331,000) during this financial year to buy three electric vehicles and to construct three EV charging stations in the capital for use by the company and for demonstration to the public.

Companies assembling and importing electric vehicles in Kenya also say the state has given them tax incentives and concessions to help them cut production costs as well as to encourage uptake of EVs in the country.

BasiGo, which assembles electric buses in Kenya, told The EastAfrican that the concessions have complemented its efforts to break the major barriers to e-mobility in the public transport sector.

The barriers include the high upfront cost of acquiring electric vehicles, unavailability of charging infrastructure, and a shortage of technical expertise for maintaining and servicing EVs.


To navigate these, Kenya allows e-mobility companies such as BasiGo to import parts or semi-built and complete vehicles at 10 percent import duty, half the tax charged on fossil fuel vehicle imports.

Also read: US firm joins rush for Tanzania lithium deposits

“Besides a tax incentive, the Kenyan government has also set a favourable electricity tariff for e-mobility companies. It’s not 100 percent of what we had lobbied for, but we got at least 70 percent of what we had asked for which is a step in the right direction,” said Samuel Kamunya, BasiGo’s head of business development.

He added that e-mobility companies are in ongoing talks with the Kenyan National Treasury and the Kenya National Chamber of Commerce and Industry to negotiate for more concessions to accelerate uptake of electric vehicles.

Operators of electric vehicles say the new technology is picking up pace because it is not only reducing their carbon footprints, but also saving them money spent on fuel and engine maintenance.

George Githinji, director of Nairobi-based public transport operator Oma Services that so far has three electric buses, says the company is making twice as much from e-buses as it makes from those using internal combustion engines.

Commuters also prefer the electric buses because they charge less fare, are noise-free and have other convenience features such as CCTV cameras, automatic doors, cashless payment and they mostly have no touts like other PSVs in the city.