From Assaad Razzouk
The clean energy transformation isn't just a climate goal; it’s a powerful economic engine. Exhibit 1: Clean energy - mostly EVs, batteries, and solar - fueled 1/3 of China’s 2025 GDP growth. Without it, growth would have slumped to just 3.5% www.carbonbrief.org/analysis-cle...
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| Chart from Assaad Razzouk |
From This is not Cool
America’s “Energy Dominance” being pwned by China in the fastest growing and most important markets, the developing world.
The Deputy Prime Minister of Ethiopia, in the video below [here], remarked, “..those that love their children, plant trees.”
The jaded cynical, fossil fueled wise guys currently running Washington are not capable of comprehending the aspirations of the great majority of humanity, who don’t care to live under the thumb of Exxon and the Epstein Class.n 2024, the Ethiopian government banned the import of fossil fuel-powered vehicles and slashed tariffs on their electric equivalents. It was a policy driven less by the country’s climate ambitions and more by fiscal pressures. For years, subsidizing gasoline for consumers has been a major drag on Ethiopia’s budget, costing the state billions of dollars over the past decade. The country defaulted on its sovereign bonds in 2023 after rising interest rates drove up the costs of servicing its debts, and it received a $3.4 billion bailoutfrom the International Monetary Fund the following year.
In the two years since the ban on internal combustion engine vehicles, EV adoption has grown from less than 1% to nearly 6% of all of the vehicles on the road in the country — according to the government’s own figures — some way above the global average of 4%.
“The Ethiopia story is fascinating,” said Colin McKerracher, head of clean transport at BloombergNEF. “What you’re seeing in places that don’t make a lot of vehicles of any type, they’re saying: ‘Well, look, if I’m going to import the cars anyway, then I’d rather import less oil. We may as well import the one that cleans up local air quality and is cheaper to buy.’”
For decades, Ethiopia’s high import tariffs on vehicles put new car ownership out of the reach of most of the country’s population. Per capita gross domestic product is only about $1,000, and even by the standards of low-income countries, it has among the lowest car ownership rates. At 13 vehicles per 1,000 people, it’s a fraction of the African average of 73. With few cars manufactured in the country, the vast majority are imported, and most are bought used.
The government’s import policy has upended the market. In parallel, tariffs for EVs were dropped to 15% for completed cars, 5% for parts and semi-assembled vehicles, and zero for “fully knocked down” — vehicles shipped in parts and assembled locally. That has made new EVs cost-competitive with old gasoline cars.
At one of Hallel Cars’ showrooms in central Addis Ababa, a Seagull hatchback made by the Chinese carmaker BYD sells for 3.6 million Ethiopian birr ($23,000), while a BYD subcompact SUV Yuan Up costs 4.9 million Ethiopian birr. Before the import ban, a secondhand compact Suzuki Dzire gasoline sedan cost more than 4.2 million birr.
“The majority of our customers are those making the switch from fuel cars to EVs,” said Moges Negash, Hallel Cars’ sales and marketing manager.
Hallel sells Toyota, Honda and Citroën EVs too, but models from BYD — which last year surpassed Tesla as the world’s biggest seller of EVs — dominate its showroom. Other dealerships around the city sell Chang’an vehicles, as well as those from Volkswagen and the Vietnamese manufacturer VinFast.
Although the price tag is still relatively high for a country where incomes are low, middle class consumers find it easier to get credit to buy new EVs than they did for secondhand gas-powered ones, which banks often wouldn’t lend against.
“Banks are reluctant to provide consumer credit for purchase of vehicles that have an uncertain fate,” said Abdulmenan Mohammed, a financial analyst based in London who covers Ethiopian banks. “EVs are a new technology and increasingly being used in the country, so it’s a better opportunity for banks to provide credit.”
For the government, the growth in EV sales is a vindication of its import policy, which in turn has been made possible by its investments in electricity infrastructure. The Grand Ethiopian Renaissance dam, completed in 2025 at a cost of $5 billion, produces 5,150 megawatts of power. Combined with other generating assets, including wind farms and solar, the country has excess generation capacity, which it sells to neighboring Kenya, Tanzania and Djibouti.
The price of delivering power to Ethiopian customers is about $0.10 per kWh, which is about half that of neighboring countries, and considerably less than the US average of $0.18 per kWh. Many Ethiopian consumers pay significantly less than that, due to consumption-based subsidies on electricity.
This is now a path open to most countries without a car industry. Solar panels are cheap as. Batteries are plunging in costs. You could run your vehicle fleet on the power of the sun. Ban the import of petrol and diesel vehicles, encourage the roll-out of household and utility-scale batteries and storage, and end the import of expensive ICEVs and oil. Clean your air, cut your balance of payments crisis, get cheap transport, and stop global heating. What's not to like?
If you do have a car industry, banning ICEV imports would still help you. And maybe, as EV sales explode, you'll encourage your own car industry to switch to producing EVs. Globally, land transport is responsible for ~20% of emissions.
Meanwhile, the US has embraced last-century technology.
World industrial production is slowing. Again, the same pattern keeps on showing up: recovery beginning in 2024, but fizzling out in 2025.
This chart shows the change over six months in China's volume of industrial production. The recovery which began in mid-2024 has aborted, probably because of Trump's tariffs. Domestic policy missteps didn't help either. The usual route China has taken in the past, namely, to overstimulate property development, is closed because there is a huge oversupply of housing (from previous stimuli), and house prices are still falling.
I presume the government will step up stimulus soon.
