Kenya Accelerates Electric Vehicle Adoption with New Tax Incentives for EV Parts and Charging Stations

NAIROBI – In a bid to hasten the transition to electric vehicles, Kenya is set to implement fresh tax incentives designed to make vehicle parts and charging infrastructure more affordable. This move aims to entice investors and support the country’s shift from reliance on fossil fuels.

Transport Cabinet Secretary Davis Chirchir announced that these incentives are integral to the newly introduced National Electric Mobility Policy, which seeks to synchronize the transport sector with Kenya’s environmental goals.

Chirchir emphasized the importance of electric mobility, noting its potential to significantly cut greenhouse gas emissions, reduce dependency on imported fossil fuels, and stimulate economic growth through local manufacturing and new job opportunities.

In recent years, Kenya has rolled out specific incentives such as a zero value-added tax on electric buses, bicycles, motorcycles, and lithium-ion batteries, along with reduced excise duties on selected electric vehicles. The upcoming incentives, set to start in July, will include exemptions from value-added taxes and excise duties. Additionally, the stamp duty on charging stations is scheduled for a reduction in 2027.

The government has set an ambitious goal to incorporate 3,000 electric vehicles into its ministries by the close 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.

Sales of electric vehicles, including motorcycles, buses and private cars, are forecast to match those of gas and diesel-fueled vehicles by 2042, marking a structural shift in Kenya’s transport system.

“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.

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