Zimbabwe lowers import duty on EVs to 25%

Zimbabwe has lowered import duty on electric vehicles from 40% to 25% to accelerate the adoption of electric mobility. The country has excluded hybrid EVs from the exemption, which means they’ll continue to pay tax at 40%. It has also extended a rebate of duty on equipment used to establish solar-power EV charging stations. 

• The number of EVs in Zimbabwe is tiny. In 2022, only 30 EVs were registered in the Southern Africa country. This is a minute proportion to the 1.4 million motor vehicles that were registered in the country at the time.

• Zimbabwe has started to embrace EVs, with its government introducing numerous incentives to grow the nascent market. While Zimbabwe is yet to attract many EV companies, Chinese automaker BYD is the only EV firm with official operations in the country.

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• Zimbabwe has also suspended customs duty on semi-knocked down (SKD) EV kits for 2 years to support local assembly of EVs. It has also set aside a subsidy of $335 million to encourage the adoption of EVs. Of this, 40% is planned to be allocated to buses and three-wheelers and 20% for two-wheelers, personal four-wheelers and taxi four-wheelers.

• The country is Africa’s leading producer of lithium, a key mineral used in the manufacture of lithium-ion batteries which are used in EVs. It is currently promoting the adoption of new energy vehicles and targeting a 33% market penetration of EVs by 2030. However, this target is ambitious considering the low uptake of EVs in the country at the moment.

• Most of the EVs in Africa are imported, but import taxes remain high. Coupled with the high prices of EVs, it makes their cost prohibitive to most buyers. Taxation makes the cost of EVs on the continent vary greatly. For instance, the BYD Atto 3 is priced at $71,000 in Zimbabwe. In South Africa, the same car is about $42,000, in Australia about $45,000 and in Hong Kong, $31,000.

• Besides Zimbabwe, a growing number of African countries are reducing import taxes on EVs and also rolling out incentives for local manufacturers. Zambia for instance is also waiving all import taxes except VAT on EVs and is doing away with VAT for local EV manufacturing. South Africa is also considering introducing tax rebates or subsidies for consumers to boost buying of EVs.

•  African countries are however faced with a tough balancing act of enabling cheaper EV imports but also promoting their local industries. South Africa, for instance, will introduce an allowance for new investments from March 1, 2026. On the other hand, it has put duty on EV imports at 25% compared to 18% for ICE vehicles. 

Our take

• Zimbabwe spends over 25% of its import bill importing cars and fueling them. A high import bill exerts pressure on availability of foreign currency in the country and stresses its local currency. Accelerating the adoption of EVs can help reduce this import bill.

• Availability of electricity is a major headache for Zimbabwe, which limits its EV industry. The country has faced devastating droughts which have ravaged its capacity to produce enough electricity from the Kariba Dam, which is its largest. Addressing its electricity supply shortage crisis will have a big say on how fast the country can adopt e-mobility.

• Zimbabwe lacks sufficient charging infrastructure for EVs. While the tax incentives on charging equipment is a positive step, more needs to be done to encourage Zimbabweans to buy EVs. Making charging stations available at key points in major towns will help reduce range anxiety.