Kenya risks missing a major opportunity in electric mobility
unless demand for electric vehicles is tied to local
assembly, component manufacturing and investment, says the Kenya Association of
Manufacturers (KAM).
According to KAM, the country is at a critical
stage in building an electric mobility industry, with more than $400 million (about Sh51.6 billion) already invested across vehicle assembly, battery
technology, charging infrastructure and related services.
“The real measure of this transition will not be how many electric vehicles
arrive at our ports, but how many leave our factories,” KAM chief executive
Tobias Alando said.
He said Kenya should use the shift towards electric motorcycles, buses,
three-wheelers and passenger vehicles to deepen industrialisation rather than
becoming primarily a market for imported fully built vehicles.
More than 100,000 electric vehicles could enter Kenya duty-free
under the government’s proposed incentive announced in May this year, creating
a potentially significant market for manufacturers.
KAM argues that the policy should also encourage local assembly in vehicle
categories where Kenya already has production capacity.
“Where local assembly is possible, the policy framework should encourage
manufacturers to invest and produce in Kenya,” Alando said.
KAM’s preliminary analysis shows a significant difference in the economic
returns between local assembly and importing fully built vehicles.
If 100,000 vehicles were assembled locally, the industry could support about 6,300 jobs in the early years, years, rising to approximately 12,500 jobs as
production deepens, while retaining about $94.6 million (Sh12.2 billion) in local value annually.
By comparison, importing 100,000 fully built vehicles would support only
about 400 jobs and retain approximately $53.5 million (Sh6.9 billion) locally.
The figures underscore the industrial stakes as Kenya seeks to expand
manufacturing’s contribution to economic growth.
Alando said investment decisions in automotive manufacturing are long-term
and require predictable policies because companies must commit capital to
factories, tooling, machinery, supplier development and skills several years
before investments are recovered.
“When tax measures change unexpectedly, regulations take too long to
conclude or policy statements leave room for different interpretations, those
decisions become harder to make,” he said.
Kenya already has an emerging e-mobility manufacturing base, with electric
motorcycles being assembled with 15-30 per cent local content, while electric buses are being
produced from Completely Knocked Down kits. Passenger vehicle assembly is also
beginning to take shape.
KAM says deeper localisation could spread the benefits across steel,
plastics, electronics, batteries, software, logistics and technical services.
The association has also pointed to affordability gains from local
production.
A Siemens Stiftung study in Nigeria found that electric motorcycles with
more than 25 per cent local content cost about 41 per cent less per unit than fully imported
motorcycles.
Kenya could similarly develop a local supplier ecosystem that lowers
production costs while creating opportunities for domestic manufacturers.
“As more components and services are sourced locally, more of that value
stays in the economy,” he said.
KAM is calling for greater clarity around the regulatory framework governing
the automotive sector.
The association said financing initiatives, including the Kenya-Japan Samurai Bond (Sh22.1 billion), which has
directed Sh13.1 billion towards the automotive and spare-parts sectors, could
further support investment in manufacturing capacity, technology and skills.
Kenya’s regional market also gives local manufacturers an opportunity to
scale beyond domestic demand through the East African Community, COMESA and AfCFTA.
Kenya’s total vehicle population is projected to exceed 10 million by 2030, with about five million expected to be two-wheelers.
EVs could account for about 8.8 per cent of the vehicle stock by 2030, according to government projections.
The same projections show EV registrations rising from about 11,680 in 2025 to nearly 47,900 in 2030.
The Ministry of Roads and Transport said cumulative EV registrations reached 39,324 by 2025, up from 1,378 in 2022, with electric motorcycles recording particularly strong growth.