Saturday, September 23, 2023
BusinessTechnical committee works to allow Chinese Volkswagen EVs into Ethiopian Market

Technical committee works to allow Chinese Volkswagen EVs into Ethiopian Market

The Ministry of Transport and Logistics is soon to lift the ban on Chinese-assembled Volkswagen electric vehicles (EVs) as a new technical committee works to identify issues and requirements to allow the EVs to enter the Ethiopian market.

The Ministry imposed a temporary suspension on imports of Chinese-made Volkswagen cars after a request from the German automaker Volkswagen.

Imported EVs that had already arrived at Djibouti port before the ban received an exemption, while importers were told to tear up deals for EVs yet to leave Chinese ports destined for Ethiopia.

Volkswagen has disowned the Chinese-made cars, claiming they were not authorized for Ethiopia’s roads.

The committee, mandated to report to the Ministry, is now working to determine what needs to be done in Ethiopia so the ban on Volkswagen can be lifted.

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Officials at the Ministry asked Volkswagen for the reasons behind the initial ban and identified potential risks through email correspondence with the Transport Ministry.

The technical committee has inquired about past incidents involving imported Volkswagen vehicles, after-sale service procedures, how importers use the vehicles, and how import authorizations were issued.

“The committee is assessing these issues to identify requirements for lifting the ban,” said an official at the Ministry. “Once this is completed, the ban will be lifted.”

An expert with many years of experience in the sector says the Ministry’s ban originally aimed to encourage local electric vehicle manufacturers.

“If the electric cars are automatic, they may lock up on inconvenient roads and become damaged due to Ethiopia’s road infrastructure…The materials are sensitive and can quickly become damaged with the slightest impact. Service delivery in Ethiopia is still progressing,” the expert noted.

The Chinese-made Volkswagen EVs have been available locally for over a year, gaining market share. Electric vehicles are exempt from VAT, excise tax and surtax by the Ethiopian government to promote electric mobility.

Only the customs tax below 15 percent remains for imported electric cars. However, prices remain high. An electric car available for USD 15,000 in the global market costs twice as much in Ethiopia.

In March, the UAE also announced a temporary ban on Chinese-made Volkswagen EVs. The suspension aimed to ensure the vehicles met UAE safety requirements and underwent proper testing before sale to customers.

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