NAIROBI – In a strategic move to promote electric vehicle (EV) adoption, Kenya is set to introduce new tax incentives aimed at reducing costs for EV components and charging infrastructure. The government hopes these measures will entice investors and expedite the shift from fossil fuels to greener alternatives.
Transport Cabinet Secretary Davis Chirchir announced that these incentives are part of the newly unveiled National Electric Mobility Policy. This policy aligns Kenya’s transport sector with its environmental aspirations and commitments.
Chirchir emphasized the importance of electric mobility in cutting greenhouse gas emissions, reducing dependency on imported fossil fuels, and driving economic growth through domestic manufacturing and job creation opportunities.
In recent years, Kenya has implemented various incentives, such as eliminating value-added tax on electric buses, bicycles, motorcycles, and lithium-ion batteries, alongside reduced excise duties on selected electric vehicles. The upcoming incentives, effective from July, will exempt value-added taxes and excise duties, while the stamp tax for charging stations will see a reduction in 2027.
The Kenyan government aims to incorporate 3,000 electric vehicles into its ministries’ fleet by the end of the following year.
Under the Paris Agreement on climate change, Kenya has pledged to lower its greenhouse gas emissions by 32% by 2030. Given the significant role of transportation in carbon emissions, the transition to electric mobility is seen as a crucial element in achieving this target.
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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