Electric Vehicle Sales Boom as Ethiopia Bans Fossil-Fuel Car Imports

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At one of Hallel Cars’ showrooms in central Addis Ababa, a Seagull hatchback made by the Chinese carmaker BYD sells for 3.6 million Ethiopian birr ($23,000), while a BYD subcompact SUV Yuan Up costs 4.9 million Ethiopian birr. Before the import ban, a secondhand compact Suzuki Dzire gasoline sedan cost more than 4.2 million birr.

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“The majority of our customers are those making the switch from fuel cars to EVs,” said Moges Negash, Hallel Cars’ sales and marketing manager.

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Hallel sells Toyota, Honda and Citroën EVs too, but models from BYD — which last year surpassed Tesla as the world’s biggest seller of EVs — dominate its showroom. Other dealerships around the city sell Chang’an vehicles, as well as those from Volkswagen and the Vietnamese manufacturer VinFast.

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Although the price tag is still relatively high for a country where incomes are low, middle class consumers find it easier to get credit to buy new EVs than they did for secondhand gas-powered ones, which banks often wouldn’t lend against.

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“Banks are reluctant to provide consumer credit for purchase of vehicles that have an uncertain fate,” said Abdulmenan Mohammed, a financial analyst based in London who covers Ethiopian banks. “EVs are a new technology and increasingly being used in the country, so it’s a better opportunity for banks to provide credit.”

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For the government, the growth in EV sales is a vindication of its import policy, which in turn has been made possible by its investments in electricity infrastructure. The Grand Ethiopian Renaissance dam, completed in 2025 at a cost of $5 billion, produces 5,150 megawatts of power. Combined with other generating assets, including wind farms and solar, the country has excess generation capacity, which it sells to neighboring Kenya, Tanzania and Djibouti. 

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The price of delivering power to Ethiopian customers is about $0.10 per kWh, which is about half that of neighboring countries, and considerably less than the US average of $0.18 per kWh. Many Ethiopian consumers pay significantly less than that, due to consumption-based subsidies on electricity.

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“Our transition to EVs is aimed at ensuring our energy sovereignty,” said Bareo Hassen Bareo, Ethiopia’s state minister for transport and logistics. “As a net importer of fuel, we are affected by global supply and price fluctuations. In contrast, EVs use electricity, which we produce locally and can price ourselves.”

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The majority of the Renaissance dam’s financing came from Ethiopian banks, though China provided two tranches of loans in 2013 and 2019 worth a combined $3 billion toward electrical equipment and transmission lines that carry the dam’s power to major cities. The support wasn’t explicitly designed to help build markets for EVs, but China has become a global leader in exporting low-carbon energy technologies, from power generation through to vehicles.

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“China is a leading nation in EV adoption and technology, particularly in battery advancements, making collaboration with China ideal for us,” Bareo said. “However, we are also open to working with any country.”

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Chinese companies are also heavily involved in Ethiopia’s nascent EV manufacturing business, which the government hopes will grow on the back of its import tariffs and other support mechanisms. 

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At a plant at Sheger City, about 40 kilometers from the capital, workers at Belayneh Kindie Group’s factory installed a battery in a 15-seat minibus before sending it out for a test drive. On the factory floor, three dozen vehicles were lined up in various states of completion, with workers installing their seats, floors, and windows. Before the finished minibuses — which are commonly used as shared taxis in Ethiopian cities — are sent to customers, they are checked by engineers. That day the inspection involved staff of the Nanjing Golden Dragon Bus, the Chinese EV company that designed and produced the parts for the vehicles.