- The report highlights the challenges slowing the adoption of e-mobility in the country.
According to a new report in Tanzania titled Africa E-Mobility Alliance, E-mobility is advancing faster than in any other country in East Africa. The report was released in March and shows that there are not less than 5,000 Electric Vehicles (EVs) in Tanzania, although e-mobility remains a “very young” industry due to some challenges.
There are a number of hurdles slowing the adoption of e-mobility and also stifling significant opportunities in the relatively open field, including high import taxes, unclear government policy, limited funding, too few technicians, low electricity grid access, and limited consumer knowledge. In February 2023, not less than 10 companies were operating in importing, selling, retrofitting, servicing, and charging electric vehicles in Tanzania.
The Energy Permanent Secretary, Felchesmi Mramba revealed that the government was doing all in its power to create an enabling business environment to promote investment in e-mobility and assured the availability of adequate electricity for EVs. He also explained that the government has hired a consultant to create a strategy to promote effective and cleaner energy which will address among other things, the use of EVs and vehicles running on compressed natural gas.
The report stated that many Tanzanians are now unable to afford electric vehicles due to high tariffs, as current import taxes for four-wheel vehicles include import duty, VAT, excise duty, and others can amount to 100% of the value of the imported vehicles. According to the report, respondents ranked lowering import taxes as having the most potential to stimulate the private sector and offering loan guarantees to local banks for EV purchases as their first or second-highest policy priority.
According to the report, there are currently no specific incentives for the import, manufacturing, assembly, or purchase of electric vehicles in Tanzania even though the government encourages the use of renewable energy in transportation systems, and it noted that lack of relevant policy is seen as a clear drag on the sector of e-mobility startups in Tanzania.
Also, limited funding or lack of financing be it grant, equity, or debt is a constraint that usually comes up in conversations with e-mobility companies in Tanzania, the report stated that very little investment of $1 million has gone into the sector. However “this pales in comparison to the $5 million in Uganda, or $50 million in Kenya, which have comparable vehicle fleets ripe for replacement”, the report reads.
Having pointed out the challenges faced in the sector, major corporations ask institutions for a wide range of assistance, including grant money, workforce education programs, the publication of policy papers, the organization of conferences and roundtables, and introductions to investors, among other things.
Grid access is highest in cities and decreases in rural areas, as is the case in many other nations when it comes to low power grid access. According to the report, urban areas have the highest levels of car density, hence Tanzanian cities are where the possibility for EVs first arises. Grid extension and small grids may both be necessary to supply electricity for EVs in rural locations.
Around 40% of Tanzanians currently have access to grid power and as part of its Vision 2025, Tanzania has very ambitious aspirations to electrify 75% of the nation by that year.