Confusion and Hope Drive Ethiopia’s EV Boom
By Aksah Italo
Published on 07/14/25
Amid the engine honking that normally characterizes the Meskel Flower area in Addis Ababa, something quieter is beginning to stir: a new kind of vehicle is gaining traction—an electric car.
At a bustling car dealership tucked between Monur Car Import & Export and retail shops, Tsegereda Alemaw finds herself locked in a disorienting conversation with a dealer determined to sell her a 4.5-million Birr electric Volkswagen.
"I want to buy it, but at the same time, I am confused," she says.
Having driven a compact, combustion engine-powered car for most of her adult life, Tsegereda now spends over 3,000 Birr a week on fuel. It’s not just the rising cost that has worn her down—it’s the vehicle’s gradually declining utility. The switch to electric isn’t just a luxury; it’s beginning to feel like a necessity.
But she’s hesitant.
“I don’t know if I’m ready to trust electric vehicles yet,” she says, despite knowing she has no choice.
After several rounds of explanations and a few circles around the showroom, Tsegereda leaves—overwhelmed, unconvinced.
Her sentiment encapsulates the prevailing attitude toward EVs. While electric vehicles (EVs) are increasingly seen as money-savers and fuel-free alternatives, uncertainty remains.
Ahmed Nuru, general manager at Monur, who has been in the business for over 10 years, understands the evolution clearly, pointing to a lot dotted with sleek EVs from Toyota, Audi, Volkswagen, and BYD’s buzzy Seagull 2WD.
“We’re seeing a whole new kind of customer walk in,” he says, ranging from the ready-to-buy to the skeptical.
Among them, the Seagull, priced around three million Birr, is by far the most popular, according to Ahmed.
"I am excited about this new line of business," he says.
However, his optimism is checked by tricky matters—rapid upgrade cycles, especially with Chinese EVs, sometimes throw the game off.
"We can’t sell old stock before the next version lands," he says.
Most vehicles come from China, Dubai, or occasionally the Djibouti free trade zone, but navigating this new terrain isn’t simple.
"It comes with challenges," he said with cautious optimism.
Ethiopia is going green. Several policy prescriptions have nudged the increased adoption of EVs. The smog from internal combustion engines is being turned on its head as government authorities crack down on gas-powered vehicles.
Chinese electric cars, once a rarity, are becoming ubiquitous, taking hold faster than expected.
At another nearby dealership, several visitors stop by, eager to scrutinize whatever electric vehicles are on offer.
Abayneh Ayele manages a crowded yard filled with BYDs, Hondas, and Neta Yu models ranging from 2.6 to 5.5 million Birr. He isn’t nearly as excited.
In the past, profit margins were generous, and the market was less volatile. Today, prices fluctuate rapidly, and many customers shop around without buying.
“Business is slippery,” he admits. “There’s too much competition, too many underpriced vehicles. I miss the old fuel cars.”
And yet, electric is the future.
Ethiopia is rapidly embracing EVs as part of a national push for a greener future. As time goes on, public appetite for fuel-powered cars is waning, with more consumers turning toward vehicles that offer both affordability and sustainability.
As retail prices surge and fuel subsidies fade under an IMF-backed reform program, consumers feel the squeeze. With a complete phase-out of fuel subsidies scheduled for next year, prices per litre have surged past the 123 Birr mark, rattling customers.
Bans on internal combustion engines for personal use took effect last year, under the direction of the Minister of Transport & Logistics, Alemu Sime.
Ethiopia is home to around 100,000 electric vehicles out of a total vehicle count of approximately 1.5 million.
The new era also comes bearing gifts. The affordability of EVs has drawn many toward their promising advantages. Where once quality and brand defined the appeal of combustion engines, affordability has now become the center of attention.
Automotive engineer Moges Negash sees both glitz and pain. As the hum of electric vehicles replaces the rumble of engines, users are systematically pushed to a new enigma.
He believes that anxieties about the reliability of EVs are increasingly being dissolved over time, as people become more picky.
“Affordability is ultimately the biggest driver of consumer preference now,” says Moges, "but the market is still infant."
Though Moges acknowledges the unprecedented variety available to consumers, he argues that the supporting infrastructure remains underdeveloped. Charging stations are sparse, battery recycling infrastructure is non-existent, and lithium refining technologies—key to sustaining EV supply chains—are yet to appear.
"It’s a cart before a horse," he said.
Ethiopia is not the first country to take the road to green. Countries around the world are increasingly adopting electric vehicles to address climate change and reduce pollution.
Western nations, in particular, have set ambitious targets to phase out new internal combustion engine vehicle sales in the coming decades.
But Ethiopia’s approach is more necessity than luxury.
With the federal budget teetering close to two trillion Birr, and a nearly 10% allocation for public debt servicing, expenditure management becomes crucial.
Ethiopia spent six billion dollars on fuel imports in 2023, over half of which went to fueling vehicles, according to a report from the Ministry of Transport and Logistics.
Retail fuel prices have surged over the past five years, driven by global market dynamics, domestic reforms, and a depreciating Birr. The gradual elimination of government fuel subsidies, a policy encouraged by international financial institutions, has shifted the burden onto consumers.
This cost factor, along with environmental and green initiative goals, has prompted the nation—with less than a three percent motorization rate—to leapfrog into green transport.
Yet the road to green is bumpy. Low-hanging batteries, rough road infrastructure, and a high likelihood of damage are thin safety nets for EV owners.
Ismael Adulahaman recently shifted to EVs after 15 years of combustion engine sales. His lots are now filled with Chinese-made Volkswagens, Toyotas, and BYDs, ranging from 2 to 20 million Birr.
“It’s not just about durability anymore,” he says. “Charging, maintenance, and price all matter; Chinese brands are winning.”
Safe-Auto Market, an automobile dealership with over a decade of experience, operates across both online platforms and on-the-ground markets. Sales have slowed to three vehicles a week despite listing models from 2 to 25 million Birr. The manager reflects the strain.
Prices of nearly all gas-powered vehicles have plunged by hundreds of thousands of Birr, forcing suppliers to scramble to clear out stock, often at a loss of millions.
“It’s a tough market,” he says. “Gas-powered cars have lost so much value. Dealers lost millions clearing old stock.”
Ethiopia’s green turn is full of surprises. According to experts, infrastructure must catch up, and consumers like Tsegereda must be won over—not just with price tags, but with confidence.