Two years ago, when Ethiopia announced an immediate ban on the import of internal combustion engines, everybody reacted with a mixture of skepticism and indifference.
It was viewed as a bold, perhaps desperate, fiscal maneuver by a nation grappling with fuel shortages and a hard-currency deficit. But the gamble on electric driving seems to pay off in one of the regions deemed most adverse to its success.
Ban on combustion engines
As we reported back in 2024, Ethiopia is carving out a niche as the ‘Norway of the Nile,’ proving that the transition to electric mobility need not be the exclusive preserve of the wealthy West.
However, when Transport Minister Alemu Sime declared in that year that Ethiopia would no longer allow fossil-fuel vehicles to cross its borders, the logic seemed pragmatic rather than purely environmental.
The nation was losing billions each year to refined petroleum imports, an expense its already pressurized foreign exchange reserves could scarcely sustain. The solution was stark: stop importing the problem and start using the solution flowing through the Grand Ethiopian Renaissance Dam: hydropower electricity.
6% of total market
Fast forward to today, and the results of this radical policy have become visible on the streets of the capital. According to Bloomberg, the fleet of electric vehicles has swelled to approximately 115,000 units, capturing nearly 6% of the total vehicle market.
For context, this adoption rate outpaces the global average (4%) and rivals nations with far deeper pockets. The once-dominant Toyotas and old Ladas are yielding ground to a new wave of affordable EVs from manufacturers like BYD and Changan.
The economics of this shift are compelling for the average Ethiopian driver. Thanks to the dam’s massive hydroelectric capacity, co-funded by Chinese loans, local electricity prices hover around a fraction of global averages.
Running an EV in Ethiopia costs a mere $4 per month, compared to the crippling $27 monthly expense for gasoline. For a taxi driver or a delivery rider, this gap is not just a saving; it is a livelihood.
Playing catch-up
However, the comparison with Norway, the undisputed leader in electric adoption, comes with caveats. Unlike the Scandinavian nations, which paved the way to electrification with oil wealth and generous state subsidies, Ethiopia is building its ecosystem on a foundation of frugality and infrastructure challenges.
While Norway boasts a supportive charger network (though less so in the far north), Addis Ababa is still playing catch-up. The government has mandated charger installations at fuel stations and new developments, yet the network remains patchy. A few hundred chargers serve a city of millions, and fast charging is still a luxury rather than a standard.
Decarbonization is no luxury good
Also, manufacturing is playing a role, though it’s largely an assembly operation. These plants, 17 in total, are primarily putting together kits shipped from China. It is a helpful starting point, creating jobs, but it is a long way from the full-scale automotive industry that policymakers envision. They want 60 sites in total.
But the progress, for African standards, is exceptional and undeniable. The ban has forced a behavioral shift that usually takes decades to engineer. Local banks are now extending credit for new EVs, recognizing the lower total cost of ownership. Most of all, Ethiopia’s experiment challenges the dogma that decarbonization is a luxury good.
By leveraging its renewable energy surplus and using the decisive instrument of an import ban – inspired by the now diluted EU ban for 2035 – Ethiopia has also leapfrogged intermediate technologies like hybrids.
The transition might be messier and less perfect than in Norway, but there’s no denying it is taking place, leading the way for the other nations on the continent expected to make the change long after the others switched.
