10:27 pm - February 4, 2026
Kenya has unveiled a comprehensive package of tax incentives designed to accelerate electric vehicle adoption as part of its National Electric Mobility Policy. Transport Cabinet Secretary Davis Chirchir announced the measures, which include exemptions for value-added taxes and excise duties on electric vehicle components and charging infrastructure beginning in July. The policy aligns the country’s transport sector with its climate commitments under the Paris Agreement.
According to government officials, the stamp tax for charging stations will be reduced starting in 2027. Additionally, Kenya has set an ambitious target to deploy 3,000 electric vehicles across government ministries by the end of next year, signaling a public sector commitment to the transition.
Kenya Electric Vehicle Market Shows Rapid Growth
The Kenya electric vehicle market has experienced remarkable expansion in recent years. The number of registered electric vehicles surged to 24,754 in 2025 from just 796 in 2022, according to government data. This growth has been largely driven by increased adoption of electric motorcycles, buses, and fleet vehicles in urban centers.
The government previously introduced targeted incentives including zero value-added tax on electric buses, bicycles, motorcycles, and lithium-ion batteries. Lower excise duties on selected electric vehicles were also implemented to encourage adoption. These earlier measures laid the groundwork for the broader policy framework now being rolled out.
Climate Commitments Drive Policy Shift
Kenya has committed to reducing greenhouse gas emissions by 32 percent by 2030 under the Paris Agreement. Transport represents a major contributor to carbon emissions, making electric mobility essential to achieving these climate targets. “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.
Mohammed Daghar, principal secretary for transport, emphasized the significance of the policy shift. “We have now laid the foundation for a cleaner, more efficient, and more sustainable transport system that fully aligns with our climate commitments,” he stated. The official noted that accelerating electric mobility is essential to achieving the country’s emission reduction targets.
Sales Projections and Regional Context
Sales of electric vehicles, including motorcycles, buses, and private cars, are forecast to match those of gasoline and diesel-fueled vehicles by 2042. This projection marks a potential structural shift in Kenya’s transport system over the next two decades. However, the transition presents both opportunities and challenges for policymakers.
Meanwhile, electric mobility policies across Africa remain in various stages of development. Rwanda and Egypt have introduced combinations of fiscal and non-fiscal incentives to encourage electric vehicle use. Companies involved in electric vehicle manufacturing and assembly in these countries also benefit from corporate income tax relief and tax holidays.
Nevertheless, most African countries currently focus on electric buses and two-wheelers rather than private passenger vehicles. Policy measures typically include tax exemptions on electric vehicle imports, investments in charging infrastructure, and pilot projects for electric public transport systems.
Revenue Challenges Loom
The transition to electric mobility carries significant fiscal risks for Kenya. The country relies heavily on fuel taxes to fund road maintenance and other transport-related services. The policy estimates that electric vehicles will displace conventional engines, creating a revenue shortfall of $693 million in fuel tax collections by 2043, up from a $16.9 million gap in 2025.
In response to these concerns, Chirchir indicated the government is exploring alternatives to replace lost fuel tax revenue. Options under consideration include road-use charges and possible electricity-based levies linked to charging stations to offset the decline in traditional fuel tax collections.
Authorities have not yet confirmed specific timelines for implementing alternative revenue mechanisms. The government is expected to provide further details on fiscal measures as the electric vehicle transition progresses and revenue impacts become clearer.
