Hyundai launches new EVs in Ethiopia

From the newsletter

Marathon Motors, the importer & assembler of Hyundai cars in Ethiopia, has expanded its EV portfolio with two brands; the Hyundai Kona EV and Hyundai Ioniq 5. The two are selling for $57,000 and $74,000 respectively. A shorter-range Kona is available at $46,000. The Ioniq 5 has a range of 600 km while the Kona EV has a range of 550 km.

• Ethiopia became the first country in the world to put a total ban on the importation of ICE vehicles in January 2024. The ban has opened space for EVs to thrive, evident from the rise of new models within the country. 

• The country is preparing for the gradual transition from ICEs to EVs on its roads. Ethiopia is increasing its energy capacity and has set regulations for charging infrastructure to fast-track investment in much-needed charging stations.

More details

• Marathon Motors is the official importer and assembler of Hyundai vehicles in Ethiopia. The company has expanded its operations to include the assembly of electric vehicles, notably the Hyundai Ioniq 5 and the second-generation Hyundai Kona EV. 

• To enhance consumer confidence, Marathon Motors offers an eight-year or 160,000 km warranty on the main battery of its EVs, alongside a complimentary one-year charging card. The company is also collaborating with TotalEnergies to install additional charging infrastructure at their fuel stations.

• In the Ethiopian market, Marathon Motors could face significant competition from Chinese EV manufacturer BYD, which entered the market in December 2024. BYD offers a range of electric SUVs, including models with ranges between 400 km and 530 km. Marathon Motors’ new models will compete with the BYD Tang and BYD Atto 3, which have ranges of 530 km and 500 km, respectively.

• Marathon Motors is also exploring opportunities within the Ethiopian market by planning to assemble electric cars locally. This initiative aims to make EVs more affordable and accessible to Ethiopian consumers, potentially reducing prices by up to 10% compared to traditional vehicles.

• However, challenges persist in the local production of EVs. The government’s policies have, thus far, favoured the importation of EVs over local manufacturing. Also, while Ethiopia possesses significant lithium reserves, essential for battery manufacturing, the country currently lacks a self-sustaining local supply chain.

• Marathon Motors, along with other local assemblers, faces challenges such as high taxes, foreign exchange instability, and competition from imported vehicles. The Ethiopian Automobile Industries Association has raised concerns about increased tariffs on completely knocked down (CKD) and semi-knocked down (SKD) vehicles, which have risen to 25% and 35%, respectively. These factors, coupled with a lack of comprehensive legal frameworks addressing licensing and insurance for EVs, pose significant hurdles for companies operating in the Ethiopian EV market.

Our take

• Ethiopia has set a goal of putting 500,000 EVs on the road by 2030. However, the local manufacturing industry is still in its infancy. Achieving large-scale domestic production within the next decade will be challenging. Imported EVs will continue to dominate the market as they provide immediate solutions to Ethiopia’s growing EVs demand.

• Also, the country faces significant obstacles in transitioning from assembly to full-scale manufacturing. High import tariffs on EV components, a lack of established partnerships with global automakers, and a weak supply chain for critical materials like batteries and electronic components make local production uncompetitive. 

• A comprehensive EV regulatory framework should also address battery quality, insurance premiums, and long-term financing options to build confidence among consumers and investors. Additionally, offering targeted tax breaks and grants for local assembly will attract investors and accelerate Ethiopia’s transition to a self-sustaining EV industry.