The global shift towards electric mobility (e-mobility) is accelerating, driven by the need to reduce carbon emissions and combat climate change. The global electric vehicle (EV) market is projected to reach USD 828.6 billion by 2025, highlighting the strong momentum towards greener transportation solutions. While Africa has been slow to catch up, there is a growing interest across the continent, with East Africa emerging as a promising hub for e-mobility. Tanzania, having the highest number of EVs in the region, presents a compelling case study illustrating both the opportunities and challenges of adopting electric transport solutions.
Trends in E-Mobility
Globally, the EV market is evolving rapidly, with electric two- and three-wheelers accounting for the largest share of EVs on the road. Asia, particularly China, dominates the market, boasting over 250 million electric two- and three-wheelers. The demand for EVs varies significantly based on regional contexts—smaller EVs thrive in densely populated nations like Japan, while larger, long-range EVs are popular in countries like Australia.
Africa’s electric mobility sector is mainly characterised by the prevalence of electric two-wheelers and three-wheelers, reflecting the continent’s dependence on motorcycles and scooters for urban transport. The market is anticipated to grow to $21.39 billion by 2027, with the motorcycle segment expected to reach $5.07 billion. However, widespread adoption is hindered by infrastructural challenges, inconsistent policies, high import taxes, and limited consumer confidence awareness.
East Africa: Pioneering the E-Mobility Shift
East African countries like Kenya, Uganda, and Rwanda have made significant strides in policy reforms and funding for electric mobility initiatives. Rwanda, for instance, offers incentives such as free government land for charging stations and tax waivers on EVs and related equipment.
This has drawn in the most prominent names in e-mobility across Africa. Companies such as Ampersand, BasiGo, and Roam have their headquarters in Kenya and Rwanda. The Ugandan government is investing $1.74 billion in Kiira Motors from 2024 to 2028 to enhance electric bus production.
While Tanzania lags behind in funding and policy clarity, it holds significant potential due to its large and relatively untapped market.
Tanzania: A Promising Market
Tanzania boasts the largest EV fleet in East Africa, with over 5,000 electric vehicles. The market primarily comprises electric two- and three-wheelers, which represent 79% of the EVs in the country. Companies such as TRI, Sinoray, Kaypee Motors, and E-Motion are leading the sector. Notable initiatives include Piki, a delivery service that has successfully deployed over 120 electric mopeds driven by women and students, showcasing the social and economic benefits of e-mobility.
Despite these advancements, Tanzania’s e-mobility sector encounters numerous challenges, including:
- High import taxes
- Inconsistent policies and the Harmonised System (HS) Codes
- Low motorisation rates
- Low awareness and availability of maintenance parts
- Limited funding
- Resistance from fossil fuel players
- Inadequate infrastructure
The lack of a cohesive policy framework further complicates market development. However, the government has started taking steps, such as removing excise duties on electric four-wheelers and e-buses, to improve affordability.
The Road Ahead
To fully realise the potential of e-mobility in Tanzania, strategic actions are required:
- Policy Reforms: Establish clear, long-term incentives and streamline EV registration processes.
- Infrastructure Development: Enhance grid reliability and expand access to charging stations.
- Funding and Investments: Promote initiatives that attract grants, high-risk equity, and debt financing for startups.
- Consumer Education: raising consumer awareness of EV benefits to drive demand.
- Technical Capacity Building: Train technicians to maintain and repair EVs.
As the e-mobility market in Africa grows, Tanzania is well-positioned to become a regional leader. By addressing current challenges, the country can capitalise on emerging opportunities, promote sustainable transportation, and drive economic growth.
Partner with Africa Insight Advisors to navigate Tanzania’s e-mobility landscape. Let’s have a chat today.
