Kenya unveils tax breaks for EV parts and charging stations to speed up shift to electrics

NAIROBI, Kenya — Kenya plans to roll out new tax incentives to speed up adoption of electric vehicles, betting that lower costs for vehicle parts and charging stations will attract investors and accelerate a shift away from fossil fuels.

Transport Cabinet Secretary Davis Chirchir said the measures are part of a newly launched National Electric Mobility Policy, which now aligns the transport sector with Kenya's climate commitments.

''Electric mobility is crucial to reducing greenhouse gas emissions, decreasing reliance on imported fossil fuels, and fostering economic growth through local manufacturing and job creation,'' Chirchir said.

Kenya has in recent years introduced targeted incentives, including a zero value added tax on electric buses, bicycles, motorcycles and lithium-ion batteries, and lower excise duties on selected EVs. The new incentives include exemptions for value-added taxes and excise duties beginning in July. The stamp tax for charging stations will be reduced in 2027.

The government has a target for 3,000 EVs for its ministries by the end of next year.

Kenya has committed to cutting its greenhouse gas emissions by 32% by 2030 under the Paris Agreement treaty on climate change, with electric mobility identified as vital since transport is a major contributor to carbon emissions.

The market is growing quickly, with the number of registered EVs rising to 24,754 in 2025 from 796 in 2022, largely driven by increased use of electric motorcycles, buses and fleet vehicles in urban areas.

''We have now laid the foundation for a cleaner, more efficient, and more sustainable transport system that fully aligns with our climate commitments,'' said Mohammed Daghar, principal secretary for transport. ''With transport a major contributor to emissions, accelerating electric mobility is essential to achieving our target.''

Electric mobility policies in most African countries are still evolving, with interest growing in use of electrics for public and private transport. Rwanda and Egypt have introduced a mix of fiscal and non-fiscal incentives to encourage use of EVs. Companies involved in EV manufacturing and assembly also benefit from corporate income tax relief and tax holidays.

Still, for many countries the focus is on electric buses and two-wheelers. Policies include tax exemptions on EV imports and investments in charging infrastructure, and pilot projects for electric public transport.

The transition carries risks. Kenya relies heavily on fuel taxes to fund road maintenance and other transport-related services. The policy estimates that as electrics displace gas and diesel engines, there will be a $693 million shortfall in fuel tax collections by 2043, up from a $16.9 million gap in 2025.

Chirchir said the government is studying alternatives, including road-use charges and possible electricity-based levies linked to charging stations to offset the decline.