Hybrid cars imported into Rwanda increased by 237 times within four years (from 2021 to 2024), and they outnumbered [pure] electric ones, according to data from Rwanda Revenue Authority (RRA).

Players in this area attribute the growth mainly to tax incentives on such vehicles, and their convenience including the ability to run on both fuel and electricity.

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As per the RRA data, electric cars gradually increased from 19 as of 2020 to 512 in total as of 2024, while hybrid cars soared from 28 as of 2021 to 6,660 as of 2024.

Of the 7,172 cars imported into Rwanda from 2020 to 2024 — both hybrid and electric, only 512, or 7 per cent of the total, are electric as per RRA data.

A hybrid vehicle is a vehicle which uses a combination of an internal combustion engine (powered by petrol or diesel engine) and an electric motor to be able to move.

As such, it is more environmentally friendly than petrol or diesel cars by using less fuel and releasing much fewer CO2 emissions.

Jean d’Amour Sibomana, a resident of Gasabo district, Kigali, told The New Times that his hybrid vehicle is automatic such that it uses an internal combustion engine that runs on petrol, which helps its batteries to charge (for electric motor) as he drives.

He said that the car is built in such a way that it accordingly switches from being powered by a petrol engine to an electric motor (by using electricity stored in batteries) – or vice versa – to allow better fuel economy.

"The reason people like them [hybrid vehicles], including me, is that it consumes relatively less compared to non-hybrid ones,” he said, adding that his hybrid car has a strong engine whose performance is observed on road ascent and descent.

"It is a better car than others available on the market,” he said, pointing out that hybrid cars help in terms of fuel economy, and they support the environment.

While [pure] electric vehicles may be good, but people do not have adequate information about them for certainty about their performance, he opined.

Also, he said that the fact that there is a shortage of charging stations across the country to ease timely access to electricity when a battery runs out of power, is one of the reasons for a relatively slow adoption of such vehicles compared to hybrid ones.

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Beatha Uwizeyimana, a hybrid car seller, told The New Times that such cars available on the market are new (in terms of the date of manufacture), consume less fuel than other automobiles that run on fuel, and are exempted from taxes, which makes their prices relatively lower for buyers on the local market.

For her, those are some of the factors that are making Rwandans want to buy them, adding that high taxes are imposed on non-hybrid or non-electric cars.

"You cannot buy a car that you are not going to sell soon, yet a hybrid car will immediately get a buyer,” she said, pointing out that as traders, they consider vehicles that they will bring into the country and will be immediately sold without overstaying in customs.

Government forgoes billions of francs in taxes

According to RRA annual report for 2022/2023 fiscal year, there was an increased uptake of the tax exemption on hybrid and electric vehicles, pointing out that this has affected the excise duty collection on vehicles and has long-term implications for excise revenues from fuel.

The report showed that tax exemptions for hybrid/electric motor vehicles and their spare parts resulted in estimated revenue foregone from import duty, excise duty, and customs VAT of Rwf13.8 billion, indicating that they were one of major tax policy changes that had a significant impact on Rwanda’s levies.

Such exemptions, it pointed out, were designed to promote vehicles which produce less environmental damage and air pollution.

There was a noteworthy growth in tax exempted hybrid/electric vehicle purchases in the fiscal year 2022/23.

According to the report, hybrid and electric vehicles, and their spare parts, are currently exempt from all taxes at import, including excise duties, import duties and VAT (value-added tax).

It observed that such vehicles consume less or no fuel, leading to lower revenue from fuel excise duties.

Overall, it indicated, the shift towards hybrid and electric vehicles is negatively impacting government revenue through reduced excise duty and customs revenue.

However, this was expected, since it contributes positively to the environment by reducing fuel consumption and the use of vehicles which are less environmentally friendly, it concluded.

Meanwhile, the number of purely electric cars and its increase are relatively small compared to hybrid cars which saw a major jump in recent years up to 2024.

Meanwhile, the number of hybrid cars is still small compared to the number of all automobiles available in Rwanda.

An April 2021 strategic paper on electric mobility adaptation in Rwanda by the Ministry of Infrastructure, showed that as of July 3, 2020, the number of registered vehicles countrywide is 264,524 excluding security organs and Government vehicles.

However, hybrid cars’ rapidly growing adoption implies they are gaining popularity in Rwanda, given that their importation into Rwanda is relatively new compared to that of other automobiles – the first vehicle arrived in Rwanda in 1927, according to information related to an online history course, from Rwanda Basic Education Board (REB).