Electric vehicle firms seek a waiver of 15 taxes on components


A charging handle recharges an electric vehicle at TJ&U garage in Buruburu, Nairobi on May 24, 2023. FILE PHOTO | NMG

Electric vehicle (EV) companies want the government to remove 15 taxes on EV components and related infrastructure to lower the prices of EVs to enable them to compete more favorably with fossil fuel cars on price.

The Electric Mobility Association of Kenya (Emak) on Tuesday lobbied the government to remove the 10 percent import duty on completely knocked down (CKD) electric bicycles as well as on CKD motorcycles.

The parts are imported from leading manufacturing hubs especially China and Japan by a growing number of EV firms for local assembly.

The lobby wants the import duty also removed on CKD three-wheelers, passenger cars, and trucks as well as the 25 percent import duty on EV charging infrastructure.

Emak has also asked the government to remove the 16 percent Value Added Tax (VAT) and 10 percent excise duty on CKD three-wheelers, VAT on passenger cars, trucks, and charging infrastructure.

It further wants the removal of a 25 percent import duty on lithium-ion batteries, 16 percent VAT on battery-as-a-service charging and leasing, and an e-mobility electricity tariff.

“Our proposal is zero tax. If we are to get this high support from the government, we are looking at EVs in the country growing to 800,000 by 2028,” said Emak President Hesborn Mose.

The sector is following last year’s roadmap when it successfully lobbied for similar tax removals, which were implemented by the government through the Finance Act, of 2023.

These include the removal of VAT and excise duty on electric bicycles, and motorcycles and VAT on electric buses and lithium-ion batteries.

Mr Mose was speaking on the sidelines of the ongoing 2nd E-mobility Stakeholders' Conference and Exhibition in Nairobi.

Kenya Power Managing Director Joseph Siror said that e-mobility offers the utility an avenue to grow its electricity sales, which will be supported by increased investments in the national power grid as well as the country’s favorable energy mix.

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