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Ethiopia Automotive: Growing EV Market Opportunities for U.S. Companies

In January 2024, the Government of Ethiopia became the first country to ban the importation of internal combustion engine (ICE) vehicles. This decisive policy is part of a broader national strategy aimed at reducing Ethiopia’s annual fuel expenditure, which currently exceeds $4.5 billion. By gradually eliminating fuel subsidies, promoting the importation of electric vehicles (EVs), and removing gasoline-powered vehicles from circulation, Ethiopia seeks to enhance its energy security and lower its reliance on imported fuels.

According to the Ministry of Transport and Logistics, Ethiopia currently has over 100,000 EVs on the road. The Government of Ethiopia aims to increase this number to 500,000 within the next decade, targeting the replacement of 95% of fuel-powered vehicles. Plans include converting 432,000 gas-powered vehicles to electric models over the same period.

Recognizing the critical role of charging infrastructure, Ethiopia plans to install EV charging stations every 50 to 120 kilometers along major roads and highways. To facilitate this growth, Ethiopia introduced the “Electric Vehicle Charging System (EVCS) Directive No. 1034/2024” in December 2024, providing a comprehensive regulatory framework, including:

  • Mandatory Installation Requirements: Vehicle importers and assemblers must establish EV charging stations as a market entry condition.
  • Licensing Requirements: Public charging service operators must obtain licenses from the Petroleum and Energy Authority. Residential installations are exempt.
  • Infrastructure Expansion Mandates: Fast-charging stations every 50 kilometers; heavy-duty charging stations every 120 kilometers.
  • Tariff Regulation: Public charging tariffs must be approved by the Fuel and Energy Authority; residential EV charging is priced at standard household rates.
  • Safety and Technical Standards: Compliance with international standards; licensed professionals and certified equipment are mandatory.

As of April 2025, two operational ultra-fast EV charging stations exist in Addis Ababa, capable of charging up to 32 vehicles simultaneously. Although smaller public and commercial stations are operational, the national network is still developing, with major expansion efforts underway.

The evolving regulatory framework and growing demand present significant opportunities for U.S. companies across several sectors:

  • Electric vehicle manufacturing and components
  • EV charging infrastructure development and technology solutions
  • Battery manufacturing, recycling, and end-of-life management services
  • Grid modernization and load management technologies
  • Engineering, procurement, and construction (EPC) services for EV infrastructure projects
  • Workforce training and certification programs for EV technicians and engineers

Ethiopia’s ambitious electrification goals, combined with its expanding clean energy resources, offer a strategic first-mover advantage for U.S. companies. Particularly within premium market segments, there is strong demand for globally recognized brands offering superior quality and cutting-edge technology.

For more information, contact: Siraj Mustefa, Commercial Assistant, U.S. Commercial Service, U.S. Embassy Addis Ababa. Email: Siraj.Mustefa@trade.gov