How fuel crisis sparked Kenya's electric cars investment frenzy

Industry data shows the electric vehicles sector has attracted approximately Sh22.9 billion in investment over the past three months. [File, Standard]

A global fuel shock has triggered a three-month, multi-billion-shilling investment rush into Kenya’s electric vehicle sector, transforming the country into one of Africa’s hottest e-mobility battlegrounds.

Fuel prices have skyrocketed globally since the escalation of the Iran conflict disrupted Strait of Hormuz supply routes on February 28 this year.

Kenya has felt the full force. Global fuel prices surged 54 per cent for petrol, 118 per cent for diesel, and 126 per cent for kerosene, forcing the government to spend Sh28.19 billion on stabilisation efforts over two cycles just to keep diesel at Sh232.86 per litre.

Without intervention, it would have reached Sh277.75, officials claimed. President William Ruto has acknowledged there is “no fuel shortage”, but the price pain is real for millions of commuters and boda boda riders who depend on petrol.

In an address from State House, Mombasa, on May 22, Ruto drew a line under the past.

“We must use the current crisis to accelerate investments in electric mobility,” he declared, before announcing that the first 100,000 electric vehicles imported into Kenya, whether for public service or private use, would be completely exempt from import duty.

The move effectively slashes the upfront cost of an EV  by up to 25 per cent, bringing mass-market Chinese and Indian models within reach of Kenya’s growing middle class and logistics fleets.

According to the Kenya National Bureau of Statistics (KNBS), the country imported motor vehicles worth a staggering Sh131.6 billion in 2025 alone.

While the vast majority remain traditional internal combustion engine vehicles, the data signals an enormous potential market ready for electrification, if the price is right, experts say.

Total vehicle imports, however, fell for the fifth consecutive year in 2025, even as local assembly grew 35 per cent over seven years.

This, analysts say, suggests Kenya could be shifting from being a dumping ground for second-hand cars to a hub for local, clean manufacturing.

Kenya’s automotive market has historically been dominated by Japanese brands like Toyota, Nissan, and Honda via the second-hand market. But the electric transition is changing the playing field, according to the latest data.

Manufacturers like TAD Motors, which assembles Kenya’s first domestic EV brand at the Naivasha Special Economic Zone, and BYD — which overtook Tesla in 2025 to become the world’s largest EV seller—are aggressively targeting Kenyan buyers, backed by strategic tax incentives from the government.

Global capital has responded with remarkable speed. The Electric Mobility Association of Kenya (EMAK) reports the sector has attracted approximately Sh22.9 billion in investment over the past three months, created over 1,000 direct jobs, and provided technical training for more than 12,000 Kenyans.

Spiro secured Sh25.7 billion in an equity round backed by European and African institutional investors, including Impact Fund Denmark and Equitane.

The funding will expand its battery-swapping network and manufacturing footprint across Kenya, Rwanda, and Uganda.

Founder Gagan Gupta says the company has already deployed 100,000 electric vehicles and 2,500 smart-swap stations across seven African markets, creating 6,000 direct and indirect jobs.

ARC Ride raised Sh1.2 billion from a separate funding round, with the International Finance Corporation contributing Sh598 million to scale battery-swap infrastructure in the ride-hailing and delivery sectors.

Zeno announced a Sh3 billion Series A funding led by Congruent Ventures and Lowercarbon Capital to scale production of its “Emara” electric motorcycle and build 150 charging stations in Kenya and Uganda.

Even as private capital rushes in, the State-owned utility Kenya Power is racing to build the infrastructure needed to make the transition viable.

In May 2025, the utility announced an ambitious plan to install 45 fast-charging stations across seven counties—Nairobi, Nyeri, Kisumu, Eldoret, Nakuru, Mombasa and Taita Taveta—within 12 months, including six chargers at Jomo Kenyatta International Airport.

“Part of our plan is to create an enabling environment for players within the e-mobility ecosystem through the provision of an adequate power supply and the requisite infrastructure, such as charging stations,” said Kenya Power Chief Executive Dr Joseph Siror, when the plan was unveiled.

The results are already visible. Electricity consumption by EVs has exploded from just 13,500 kilowatt-hours in July 2023 to over 1.5 million kilowatt-hours in April 2026 — a more than 100-fold increase.

Monthly revenue from EV charging has simultaneously climbed from about Sh1 million to over Sh35 million.

Kenya Power says cumulative electricity sales to the sector have surpassed 17 million kilowatt-hours, generating approximately Sh382 million in revenue.

The utility has also introduced a dedicated e-mobility tariff aimed at providing affordable charging rates for EV owners.

Kenya’s EV registrations have surged 2,700 per cent in just three years, from 1,378 in 2022 to 39,324 in 2025, according to Roads and Transport Cabinet Secretary Davis Chirchir.

Electric motorcycles, or boda bodas, dominate the sector and account for the largest share of EVs.

They help riders cut operating costs by 40-50 per cent compared to conventional fuel-powered motorcycles.

Industry stakeholders project that Kenya could have more than 377,000 electric vehicles on its roads by 2030.

The government has already ordered 3,000 EVs for its own fleet, sending a strong demand signal to manufacturers.

“We are uniquely positioned to lead the electric mobility transition,” Energy and Petroleum Cabinet Secretary Opiyo Wandayi said at the recent Fourth E-Mobility Conference and Expo in Nairobi.

“Approximately 90 per cent of our electricity generation comes from renewable energy sources.”

With a Sh22.9 billion capital injection over three months, a duty-free window for 100,000 imports, a rapidly modernising grid, and a President willing to use a fuel crisis as a catalyst, analysts see Kenya accelerating away from fossil fuels, with global investors scrambling for a seat.