By Patricia Mollyne Mataga
The government has announced a new incentive as it seeks to encourage more Kenyans to own electric vehicles.
President William Ruto on Wednesday, May 22, 2024, said his administration is planning to issue a tax waiver on newly purchased electric vehicles.
In his address to the Fortune 500 Companies Chief Executive Officers in Atlanta, the Head of State said the first 100,000 electric vehicles to be manufactured in Kenya will be exempted from all taxes in line with the government’s objective to phase out all traditional fueled cars.
He also noted that Kenya has put in place policies to incentivise the transition to e-mobility including attracting local and foreign investors.
“We also lead in e-mobility. You heard Ambassador Meg Whitman, who stated that we host over 30 e-mobility companies and attract regional players,” Ruto stated.
“Just for you to contextualise this, in this year’s budget, we will eliminate all taxes for the first 100,000 electric cars,” he added.
The announcement means Electric Vehicles will be exempted from a 10 per cent import duty on completely knocked-down electric vehicles, a 25 per cent import duty on lithium-ion batteries, and a 25 per cent import duty on EV charging infrastructure.
Currently, most of the electric vehicle parts are mainly imported from leading manufacturing hubs such as China and Japan by e-mobility firms for local assembly.
The government has set a target of increasing the number of registered electronic vehicles from 1.62 per cent to 5 per cent by 2025.
Data from the Energy and Petroleum Regulatory Authority (EPRA) show that there are about 350 electric vehicles (EVs) registered in Kenya. This figure is out of a total of 3.5 million registered vehicles of which we estimated only 2.2 million to still be on the road.
Kenya’s transport sector, particularly road transportation, has been listed as one of the main sources of climate-damaging CO2 emissions. The reason for this is the predominant use of fossil fuels for vehicle propulsion systems.
“A greater degree of electrification of the transport sector, can therefore make a major contribution toward achieving Kenya’s transport sector goal of reducing emissions by 3.46 MtCO2e against the baseline in 2030,” notes EPRA.