Dar es Salaam. A new report has found that Tanzania has the largest number of electric vehicles (EVs) than all EVs in East Africa combined, with over 5,000 EVs estimated to be on the road.
The report, titled The Barriers to E-Mobility in Tanzania, is part of a two-part series in collaboration with UN-Habitat and the Urban Electric Mobility Initiative (UEMI) on the barriers to and policies for electric mobility in Tanzania.
This first report, released on Thursday, is on the barriers to e-mobility in Tanzania and was led by the Africa E-Mobility Alliance (AfEMA) and supported by UNH and UEMI.
The following upcoming report is on the policies for e-mobility in Tanzania and is supported by AfEMA.
Written by Tom Courtright, Warren Ondanje, and Paschal Giki, the 26-page report says that over the last few years, at least ten companies have entered the e-mobility industry market in Tanzania.
They give an example of Piki, a food delivery service that has successfully deployed electric mopeds driven by women and students, exemplifying the demand and opportunities for affordable and reliable EVs suppliers in Tanzania.
But the report’s authors warn that the electric vehicles industry in Tanzania faces several barriers which slow adoption.
The challenges include, but are not limited to, high import taxes, unclear government policy, limited funding, too few technicians, low electricity grid access, and limited consumer knowledge.
“As electric vehicles are primarily imported, distributed, and serviced by private sector actors, and the business is capital-intensive, there is a need for a significant increase in funding in the sector,” they suggest.
According to them, the funding could be grant money for research and development and small pilots, high-risk equity funding, and debt financing provided by vehicle asset financiers, traditional banks, or infrastructure lenders.
This is something that the researchers think is not happening, pointing out that Tanzanian e-mobility companies have raised only a little over US$1 million so far in investment.
This is very small compared to over US$5 million in Uganda and $50 million in Kenya. The researchers think that this challenge restrains the ability of startups to serve the Tanzanian market.
“Electric vehicles are a new technology, and as such, have yet to be fully understood by customs agents, standards officials, and policymakers,” the report’s authors argue. “In some cases, policies are unclear, and in others, they are being applied haphazardly.”
In Tanzania, e-mobility startups report a wide range of experiences with government regulation, the report reveals.
For example, some have had no issues with registration but are paying over 50 per cent taxes on their imports, while others cannot register their vehicles or get license plates or insurance.
“There is a need for clarity from the government on policy and a roadmap for adoption,” the authors advise.
“Finally, customer awareness, technical capacity, investor interest, and public policy require functional ecosystem actors such as associations, civil society, and individual experts to research e-mobility and its potential in Tanzania,” they add.
