Leasing over buying: How Kenya’s EV startups are dodging high taxes

Faced with punishing import taxes, Kenya’s electric vehicle (EV) startups are pioneering alternative business models to keep green transport alive.

Rather than selling EVs directly, companies like Rideence and Ebikes Africa are leasing them to drivers and delivery riders. This workaround allows users to bypass steep purchase costs inflated by tariffs of up to 55%, while startups absorb the tax burden.

“Import duties make owning a new EV almost impossible for average Kenyans,” said Joseph Macharia, head of Rideence’s ride-hailing division. “So we lease. It’s the only way to stay in business.”

A compact electric car, which costs $6,500 to $8,500 in China, hits the Kenyan market at nearly $19,230, making direct ownership a luxury. Rideence leases these vehicles at $25 per day, allowing drivers to earn and pay incrementally, though the lease offers no path to ownership.

Ebikes Africa is taking a different route. The company offers electric bikes at $760, with riders paying $3 daily over 11 months. Unlike Rideence, riders gain full ownership once payments are complete. The startup also connects users with gig economy jobs through food delivery platforms to ensure steady income.

“Our riders are young, often fresh out of school,” said Jorgs Mbugua, CEO of Ebikes Africa. “We give them tools to earn immediately and eventually own the bike.”

Mbugua’s firm also manufactures customized e-bikes and electric wheelchairs using repurposed batteries and Chinese components, designed for Kenya’s tough terrain and erratic power supply. These swappable battery systems allow for continuous use, even in regions with unreliable electricity.

Despite these innovations, the bigger challenge looms: Kenya’s tax regime is throttling EV adoption. And it comes at a cost.

China, which produces 60% of the world’s EVs and leads the global battery market, has become an essential source of affordable e-mobility solutions for developing economies. But without policy reforms, Kenya risks losing its place in that supply chain.

“The problem isn’t innovation, it’s regulation,” said Mbugua. “We’ve built models that work for Kenya. But the government needs to meet us halfway.”

As fuel prices rise and cities choke on congestion and pollution, EVs offer Kenya a lifeline. But without urgent tax incentives or import relief, the startups driving this shift may stall—along with the country’s green transport ambitions.

If nothing changes, Chinese suppliers could shift focus elsewhere, and Kenya won’t just lose businesses. It’ll miss out on the future of clean, inclusive mobility.

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