Saturday, April 20, 2024
NewsForex crunch pushes Marathon Motors to discontinue electric car assembly

Forex crunch pushes Marathon Motors to discontinue electric car assembly

Ethiopia’s pioneer electric car assembler has been forced to temporarily halt its production line dedicated to electric cars due to a critical shortage of foreign currency to import components.

Marathon Motors Plc, which is co-founded by the legendary athlete Haile Gebreselassie, its major shareholder, is the first company to assemble an electric car in Ethiopia.

It was in 2020 that the company launched the country’s first assembled electric car, branded Hyundai.  Two years later, the company also unveiled the country’s first electric car charging station along with 20 locally assembled electric cars.

Though the managers of the company were aware of the challenge of running their manufacturing line for electric cars at full capacity, the original plan was to shift 80 percent of its production into electric cars. “We have not expected the FX shortage to arrive at a critical point,” said Haile Gebreselassie, who also confirmed that the production line has been shut down as a result.

His testimony comes just a month after the government announced the lifting of all types of taxes levied on electric cars, whether they are assembled locally or not.

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The problem is not about policy but rather about forex allocation, according to a senior executive at Marathon. “Though the current government policy encourages the use of electric cars, we are not getting forex,” the executive said, adding the company had not been able to get forex from banks in the last four months.

Marathon, which is the authorized dealer and assembler of Hyundai in Ethiopia, currently utilizes only five percent of its overall capacity to fuel cars. The car assembler has the capacity to assemble 14 different types of cars, 36 per day and 10,000 cars per year.

“We are almost phasing out each of our production lines, sadly, due to the forex shortage,” Haile said.

Logistics problems are also to blame for the challenge the company is facing now, according to its managers.

When Marathon rolled out electric cars for the first time, the selling price was 3.3 million birr.

“Several customers are on the waiting list to buy the car, though we have suspended the line due to the forex shortage,” said the executive of the company.

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