Chart of the Week: Kenya’s growing electric vehicles market signals investment opportunities

Kenya's transport sector is transitioning from internal combustion engine (ICE) vehicles to electric vehicles (EVs). In 2023 alone, a record 2,694 EVs were sold, representing a fivefold increase from 2022. This is after the government exempted all fully electric vehicles from value-added tax (VAT), making them affordable, and the trend is expected to continue in 2024.

The Kenyan EV market has grown increasingly attractive since 2019, when the government initiated a rollout of favourable policies. This began with reducing excise duty on electric motorcycles from 20% to 10%. Further policies followed in 2023, including a special e-mobility electricity tariff and the exemption of fully electric vehicles from VAT. 

Additionally, the availability of asset financing loans from commercial banks such as Kenya Commercial Bank and NCBA, along with innovative pay-as-you-go mechanisms, have played a significant role in accelerating EV adoption. These initiatives have collectively improved EV affordability, making them competitive with