Tanzania has highest number of electric vehicles in E Africa, but market stagnant – report
Written by: Yunus Kemp
Tanzania has more than 5,000 electric vehicles on its roads, but several barriers are hampering the sector’s growth, a recent study shows.
With this number of EVs, it is estimated the country has the highest number of these vehicles in East Africa.
This is despite Tanzanian e-mobility companies securing slightly more than $1 million in funding, compared to Uganda’s $5m and Kenya’s $50m, says the Africa E-Mobility Alliance.
In the alliance’s Barriers to E-Mobility in Tanzania report, it points out that “a variety of barriers continue to face the industry, from high import taxes and unclear registration processes to a lack of funding options or knowledge from consumers.”
“To accelerate the rollout of e-mobility in Tanzania, it is clear that there is a need to address three major barriers: a lack of supportive policy, a dearth of financing options for startups, and a weak supporting ecosystem,” the report points out.
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As of February 2023, there were at least 10 companies involved in importing, selling, retrofitting, servicing, or charging electric vehicles in Tanzania.
The report says the most common model is import, distribute and service the vehicles.
“But several are looking into building charging solutions in order to ensure accessible charging for customers.
The report on the barriers to E-Mobility in Tanzania is finally out! It presents a detailed analysis of the challenges encountered by the nation in implementing e-mobility, and proposes potential solutions.— Africa E-Mobility Alliance (@AfricaEMDA) March 30, 2023
Learn more by delving into the details https://t.co/1sGyipU07o pic.twitter.com/luyzRjxPdf
Tanzania has over 5000 EVs on its roads, which makes it the country with the highest number of EVs in East Africa. This is despite Tanzanian e-mobility companies securing slightly over $1 million in funding as compared to Uganda $5M and Kenya $50M https://t.co/1sGyipU07o pic.twitter.com/OiyruDMTi9— Africa E-Mobility Alliance (@AfricaEMDA) April 5, 2023
Lack of competition in electric vehicle sector in Tanzania attractive to investors
“Furthermore, discussions with regional companies and interested parties reveal significant interest in the Tanzanian market and signal the likelihood of several new entrants to the market.”
The report says startups report that Tanzania is attractive for two reasons: the size of the market and the relative lack of competition.
“This lines up with the relative size of the market: Tanzania is the largest country by population and area in East Africa, while the more than two million vehicles on the road are being serviced by less than a dozen companies – all relatively young – pushing to transition them to e-mobility.”
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There has been a steady increase in the number of two- and three-wheelers (motorcycles and tuk-tuks) throughout Tanzania, and they have now become a common sight on the streets.
In 2007, there were a mere 52,015 two- and three-wheelers registered in Tanzania, but this exploded to 1,282,503 by 2016, accounting for 59% of all registered vehicles in the nation.
Imports of electric vehicles into Tanzania has increased, but market remains small
In the same time, Tanzania has added significant gas-powered generation to the electricity grid, which has enabled the expansion of the grid to nearly triple electricity access between 2010 and 2020.
However, this has made the previously hydro-dominated grid dirtier.
Globally, the electric car stock surpassed 10 million in 2020, marking a 43% increase over 2019 and representing a 1% share.
Electric two- and three-wheeler vehicles have expanded much faster globally, and there are already over 250 million on the roads, primarily in Asia, the report points out.
“With dropping costs for these vehicles, Tanzanian entrepreneurs have begun importing electric vehicles or converting existing vehicles to electric over the last few years – yet it remains a very young industry,” the report says.
The first e-mobility innovators fair in Tanzania! pic.twitter.com/MbDFXLf4Gg— Tom Courtright (@Tom_Courtright) March 22, 2023