Ethiopia bets on electric future with world’s first fuel car import ban

Ethiopia, long known for crippling fuel shortages and frequent power cuts, is now rewriting its automotive future. The country has become the world’s first to ban imports of petrol and diesel cars, betting that cheap, green hydropower will propel millions of drivers into the electric age.

For buyers like Deghareg Bekele, a 32-year-old architect, the gamble has already paid off. Before switching to a Volkswagen EV, he often queued for three hours at fuel stations, only to find the pumps dry. “Having an EV saves me so much time,” he said at a charging station in Addis Ababa. “I have no regrets.”

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A dramatic policy shift

Electric cars were once rare in Ethiopia. But since the government barred combustion-engine imports last year, the streets of the capital now hum with BYDs, Teslas and other EVs. According to the Transport Ministry, 115,000 electric cars are now on Ethiopian roads, out of a total fleet of 1.5 million. Authorities aim to raise that to 500,000 by 2030.

State Transport Minister Bareo Hassen said the policy serves two goals: fighting air pollution and easing a crippling fuel import bill of $4.5 billion a year. “It is one of our biggest expenses, and foreign currency is scarce,” he told Reuters. “Our hydropower is both cheap and green. That is the future we want.”

Hydropower ambitions

This month, Ethiopia inaugurated the long-delayed Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile. At 5,150 megawatts, the dam will double the country’s power output. Already, 97% of Ethiopia’s electricity comes from hydropower, making it one of Africa’s cleanest grids.

But challenges remain as half of Ethiopia’s 126 million people still live without electricity, and only one in five households enjoy near-continuous supply. The national grid requires billions in investment to reach rural communities. Even in Addis Ababa, drivers complain of outages that sometimes halt charging mid-session.

For drivers, the math is clear. Taxi driver Firew Tilahun once spent 20,000 birr ($350) each month on petrol, eating up much of his earnings. Now, his charging costs are less than 3,000 birr. “I have no plan to go back,” he said while topping up his BYD.

Yet affordability remains a barrier. A new EV costs around 2.2 million birr ($38,000), while the average doctor earns just £60 a month. Tax breaks help, but Ethiopia still needs local manufacturing to bring prices down.

At a plant on the outskirts of Addis Ababa, workers are assembling 150 Chinese-made electric minibuses under license. “We don’t want to rely only on imports,” said Hassen. “Local production builds skills and creates jobs.”

Infrastructure gap

Still, Ethiopia has just 100 charging stations, almost all in the capital, far short of the government’s 2,300 target. By contrast, London alone has 21,600 charging points. Drivers like coffee exporter Lema Wakgari say this makes road trips impossible. “This car can go 420 km, but where will I charge it after that?” he asked.

Heavy trucks, the backbone of trade with Djibouti, are another gap. Ethiopia has no plans yet for electric lorries, raising concerns about how the transition will affect supply chains.

Despite these challenges, attitudes are shifting. The CEO of a major ride-hailing company admitted he first dismissed the ban as “a spectacular failure.” But after buying an EV himself, he is more hopeful. “We still lack infrastructure, but now I’m cautiously optimistic.”

Ethiopia’s path is far from smooth. But if the government delivers on its promises, the country may prove that even a nation with blackouts and poverty can leapfrog into a cleaner transport future.