E-mobility startups in Kenya have raised USD 53 million, but the number of EVs on the road lags behind Tanzania.
E-mobility startups in Kenya have raised USD 53 million, according to a report by The African E-Mobility Alliance (AFEMA). The organization estimates that 40 Kenyan e-mobility start-ups have to date raised USD 52 million in capital financing, the highest in Africa. However, AFEMA also claims that there are only 350 electric vehicles on Kenyan roads as of March 2023.
E-mobility – Tanzania in the lead
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 USD 1 million in investments. Rwanda has about 900 EVs on its roads while Uganda, with nine companies that have raised USD 5 million, is also ahead of Kenya. 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.
Large market, little competition
Additionally, the Tanzania report, downloadable here, notes that Tanzania’s large market and relatively low level of competition make it attractive to e-mobility companies. However, several obstacles are preventing widespread adoption, including high import taxes, unclear government policy, a lack of funding, a shortage of technicians, poor access to the electricity grid, and a lack of consumer education.
Kenya’s government takes steps
According to Africa Energy Portal, The Kenyan National Treasury is planning to lower taxes and customs duties on the “importation, local assembly or marketing of electric vehicles” in Nairobi and the country’s 46 other counties. The measure will be enshrined in the Finance Act 2024 after validation by local authorities and parliamentarians. According to Kenya’s Energy and Petroleum Regulatory Authority (EPRA), the tax incentives will initially encourage the introduction of at least 350 electric cars and bikes.
According to estimates, 1 in 250 cars worldwide is electric, giving them a market share of about 2.2%
Earlier this year, mobility startup Treepz announced its expansion from Nigeria into Kenya.