Electrifying Kenya’s Transportation Sector — EMAK Proposes Coverage Measures to Promote Electrical Mobility

In a brand new white paper EMAK additionally highlights fiscal advantages derived from accelerating the transition to electrical.

The Electrical Mobility Affiliation of Kenya (EMAK) is a various and dynamic neighborhood that features trade consultants, entrepreneurs, policymakers, teachers, innovators, and enthusiastic people who imagine within the potential of electrical mobility to form a sustainable future. EMAK assumes the function of a robust advocate for electrical mobility in any respect ranges, from native communities to nationwide insurance policies. By way of engagements with authorities our bodies, regulatory authorities, and related stakeholders, EMAK works to create an enabling atmosphere for the expansion of electrical mobility in Kenya.

EMAK can be devoted to elevating consciousness about the advantages of electrical mobility by way of instructional packages, workshops, public campaigns, and collaborations with instructional establishments. EMAK goals to empower people and companies to make knowledgeable selections and embrace electrical mobility options. EMAK additionally actively collaborates with trade gamers and authorities companies to drive the enlargement of charging networks, making certain the accessibility and comfort of charging services for EV homeowners throughout Kenya. EMAK can be a hub for analysis and innovation within the electrical mobility area. Due to this fact, EMAK helps and promotes analysis tasks, technological developments, and modern options that speed up the expansion of electrical mobility whereas addressing challenges and alternatives distinctive to our area.

EMAK has simply launched a brand new white paper highlighting coverage measures and incentives that, if totally carried out, might supercharge Kenya’s electrical mobility sector. EMAK says the white paper presents a complete coverage and financial roadmap for accelerating the adoption of electrical automobiles (EVs) in Kenya, positioning the nation as a regional chief in clear and sustainable transportation. The paper appears at present market circumstances, localization challenges, infrastructure gaps, and evaluates the impression of various ranges of presidency assist by way of state of affairs modelling from 2025 to 2040.

The paper highlights that throughout almost each part required for native manufacturing, native manufacturing prices are at the least 50% increased — and in lots of instances, over 300% increased — than direct imports, regardless of Kenya’s efforts to assist the native meeting sector. The paper lists among the potential causes for these excessive prices of native manufacturing and meeting as:

• Lack of Economies of Scale: Chinese language automotive producers for instance produce tens of millions of elements yearly, considerably lowering unit prices by way of economies of scale. Whereas Kenyan producers function on a a lot smaller scale, with restricted annual demand volumes that can’t justify large-scale automated manufacturing. For instance, crash guards and handlebar units that value USD 7–10 to import could value as much as USD 70–75 to provide domestically as a result of inefficient tooling and setup prices unfold over fewer models.
• Excessive Value of Uncooked Supplies and Tooling: Kenya lacks a totally built-in provide chain for automotive-grade metals, plastics, and digital elements. Most supplies have to be imported in smaller portions, resulting in increased per-unit prices. Moreover, the price of tooling and equipment for precision manufacturing is substantial and sometimes have to be amortized over a small manufacturing run, considerably inflating the per-unit value of manufacturing.
• Excessive Labour and Vitality Prices: Though Kenya’s labour is comparatively reasonably priced, native manufacturing faces inefficiencies as a result of restricted automation and decrease workforce specialization. Moreover, power prices in Kenya are among the many highest within the area—averaging between KES 20–30 per kWh for industrial customers—elevating operational prices for producers who depend on energy-intensive gear corresponding to welders, cutters, and CNC machines.
• Regulatory Burdens and Taxes on Inputs: Whereas imported completed merchandise profit from consolidated import tax calculations, native producers typically face a number of layers of taxation: Import Responsibility on inputs, VAT, Excise Tax, Import Declaration Charges (IDF), and Railway Growth Levy (RDL) on uncooked supplies and sub-components. These cumulative taxes inflate manufacturing prices and make native manufacturing much less aggressive.
• Restricted Entry to Finance and Technical Help: Native producers battle to entry reasonably priced long-term financing for industrial funding, in contrast to their Chinese language counterparts who profit from state-backed loans and subsidies. In Kenya, excessive rates of interest and lack of devoted financing schemes for native meeting constrain the sector’s progress and productiveness.
• Customs Delays and Logistics Inefficiencies: The time taken to clear uncooked materials consignments at ports, mixed with excessive inland transport prices and infrastructure challenges, provides to the entire value of domestically manufactured components. Conversely, Chinese language exports profit from built-in provide chains and export incentives that reduce supply instances and prices. EMAK says Contemplating the above disparities, there’s a sturdy coverage justification for the Authorities to introduce focused tax incentives to degree the taking part in area for native producers. With out such assist, native producers will proceed to be undercut by imports, resulting in deindustrialization and job losses.

EMAK’s paper subsequently recommends focused tax reliefs to reinforce native meeting competitiveness and stimulate industrial progress below the “Purchase Kenya Construct Kenya” coverage.

The Proposed Fiscal Measures and Justifications within the white paper are centred on a tiered system of fiscal incentives, together with:

• Tax exemptions on VAT, import obligation, and excise obligation for EVs, batteries, and EVSE.
• Complete incentives below a Particular Working Framework Settlement for big buyers (e.g., 0% company tax, exempted stamp obligation, and customs duties).

These measures goal to:

1. Scale back whole value of possession for EVs.
2. Catalyse native worth addition.
3. Appeal to overseas direct funding.
4. Allow job creation.

Let’s check out Kenya’s present automobile panorama.

As you may see, bikes make up over 50% of the nation’s fleet. It’s no shock then that bikes are seeing many of the motion in Kenya, and for the time being, the motorbike sector is the primary driver of electrical automobile adoption. In 2024, simply over 7% of recent motorbike registrations had been electrical, adopted by 4% for electrical tuk tuks, 1.1% for electrical buses and minibuses, after which 0.18% for electrical vehicles.

EMAK’s white paper fashions three adoption situations — Low, Reasonable, and Excessive Authorities Help to advertise electrical mobility:

• Low Help: No subsidies, minimal charging infrastructure, no tax reliefs.
• Reasonable Help: Partial tax exemptions, pilot tasks, public fleet electrification.
• Excessive Help: Full tax incentives, appropriate environments for native meeting and manufacturing, grants for personal EV adoption, large-scale infrastructure deployment, and obligatory electrification targets.

Right here is an earlier instance from EMAK on the kinds of interventions illustrated right here for a 3-year interval.

Outcomes:

• Excessive Help state of affairs leads to over 2 million EVs by 2040, versus 500,000 below a Low Help state of affairs.
• Electrical two-wheelers might attain 1.5 million models by 2040 below Excessive Help, a 4 instances enhance over the Low Help state of affairs.
• The whole gas income forgone by 2040 is estimated at USD 1.4 billion, offset by elevated electrical energy gross sales and EV-related tax revenues.
• CO? emissions prevented below the Excessive Help state of affairs exceed 3.2 million MtCO?e.
• In all situations, progress is pushed by the motorbike sector. For Low Help  the variety of electrical bikes grows from 11,097 models in 2025 to 310,718 by 2040. The expansion stays modest and means that with out coverage interventions, the electrical motorbike  market develops however stays restricted in scale and protection. That is primarily brought on by affordability and accessibility of E2W the market. For Reasonable Help, the variety of electrical bikes will increase from 13,250 models in 2025 to 1,064,620 by 2040, indicating that sustained authorities assist drives fast market growth. Excessive Help, the electrical motorbike inventory expands considerably, from 17,552 models in 2025 to 1,506,788 in 2040, demonstrating the impression of cumulative coverage impacts and market maturity. By 2040, the inventory within the excessive state of affairs has greater than 4 instances the inventory in comparison with the low assist state of affairs. This progress is achieved by the implementation of assist mechanisms corresponding to full tax waivers, direct subsidies, appropriate electrical energy charging tariffs, financing schemes, and accessible charging infrastructure.

Nice work from EMAK. Kenya is without doubt one of the international locations on the African continent that’s actually making an attempt to advertise electrical mobility, and most of that is being spearheaded by startups and personal corporations which can be all members of EMAK. It will be nice to see extra of those associations in additional international locations on the African continent.

You will discover extra of EMAK’s present and previous work right here.