Financial and tax incentives for adoption of electric vehicles

The Kenya Kwanza government promised to provide financial and tax incentives for public service vehicles and commercial transporters to convert to electric vehicles.

• Progress includes reduced import duties and taxes on EVs and components, especially electric buses and motorcycles, alongside efforts by Kenya Power and private companies to expand the charging infrastructure nationwide.
• BasiGo start-up has grown to produce a monthly average of six  electric buses and aims to deliver 1,000 units in East Africa by the end of 2026. This fast-growing example of shifting towards electrical public service vehicles is a result of  VAT exemptions on manufacturing EVs.
• The government also launched the E-mobility Policy in 2026. The Policy proposes that the government considers granting incentives to lower the total cost of ownership of EVs and enhance their attractiveness. This could include import tax reductions, VAT exemptions, and usage benefits like parking and lane privileges.
• The 2026 Budget Policy Statement reports increasing adoption of electric motorcycles, buses and light commercial vehicles, particularly in Nairobi, Mombasa and Kisumu. The government has also supported pilot programmes involving electric buses in public-transport fleets.
• However, key obstacles persist, including the high upfront cost of EVs for commercial operators, limitations in charging infrastructure outside major cities, regulatory gaps, and a shortage of mechanics and technicians skilled in EV maintenance. Public awareness and trust in the technology also remain low among some consumers. While these hurdles slow the transition, government commitment, private sector investment, and pilot programs offer a path toward more widespread adoption.
• Moreover, the full financial-incentive system promised to PSVs has not yet been fulfilled and the legal framework for this whole program has not been enacted. On 24 August 2026, the State Department for Transport signed an agreement with the International Financial Corporation to support the implementation of Kenya’s National Electric Mobility Policy. This will include the development of an E-Mobility Bill and attendant regulations, the development of short, medium and long-term targets for Kenya’s e-mobility transition as well as reviewing the fiscal and non-fiscal incentives across the EV value chain.