Ethiopian Investment Holdings Made the Right Call: Why Ethiopia Needs to Control Its EV Future, Not Outsource It

Ethiopia’s electric vehicle (EV) sector is at a pivotal moment. As the demand for electric two- and three-wheelers surges in cities like Addis Ababa, battery-swapping technology has emerged as a promising solution. The model is already proving successful in China and India, where companies like NIO and Ola Electric have revolutionized charging infrastructure. So when Dodai, a Japanese-backed startup operating in Ethiopia, announced its plan to roll out battery-swapping stations, the idea seemed like a game-changer. The promise was simple: riders pull up, swap their depleted batteries for fully charged ones, and continue their journey—no waiting, no hassle.

On the surface, it looked like Ethiopia was making a bold leap into sustainable mobility. But beneath the excitement, Dodai’s financial model raised serious concerns. Earlier in 2024, Dodai raised $4 million in its Series A funding round, bringing its total capital raised to $7 million. The latest investors included Japanese venture capital firms Nissay Capital and Inclusion Japan, along with the auto parts company Musashi Seimitsu. The founder himself admitted that 80% of the funds raised would go toward importing key e-bike components, including lithium batteries. That alone was a red flag. Ethiopia wasn’t building an independent EV ecosystem—it was being positioned as a market for foreign-made products, with Dodai acting as the middleman.

The deeper issue was the financial interests at play. Nissay Capital, one of Dodai’s main investors, has a long track record of backing Japan’s battery industry. In September 2011, the same firm helped fund ELIIY Power Co., Ltd., a Japanese battery manufacturer, with a $98 million private equity investment alongside Goldman Sachs, Mitsui Sumitomo, and other corporate giants. ELIIY Power produces the same type of lithium batteries that Dodai’s bikes would use. In other words, if Dodai were to dominate Ethiopia’s battery-swapping infrastructure, most of the profits from the industry—whether from battery imports, hardware sales, or operational revenues—would ultimately flow back to Japanese investors. Ethiopia’s role? Merely a customer in its own market.

This is why Ethiopian Investment Holdings (EIH) made the strategic decision to walk away from Dodai’s proposal. It wasn’t just about rejecting a single company—it was about reclaiming control over Ethiopia’s EV market and ensuring long-term value creation. Instead of allowing a foreign-backed startup to control battery-swapping stations, EIH is now shifting toward a venture capital model that will support Ethiopian startups in building and owning the industry. In an official statement, EIH confirmed that similar investments would be more effectively managed through a dedicated VC fund, allowing for better risk management, targeted returns, and stronger operational support.

Ethiopia must learn from global EV leaders. The countries that thrive in this sector don’t just adopt electric vehicles—they control their production, battery technology, and supply chains. China didn’t achieve EV dominance by relying on foreign imports. It invested heavily in domestic battery production, ensuring that companies like CATL and BYD could not only meet domestic demand but also shape the global supply chain. If Ethiopia simply allows foreign investors to dictate its EV strategy, it will never develop the infrastructure, expertise, or local industries necessary to compete in the long term.

This decision isn’t just about batteries—it’s about Ethiopia’s broader industrial strategy. Instead of settling for an economy that consumes foreign-made products, EIH is taking a deliberate step toward making Ethiopia a production-based economy. That means securing local lithium resources, investing in battery assembly plants, and supporting research into alternative technologies like sodium-ion batteries. By doing so, Ethiopia ensures that the financial benefits of its EV transition stay within the country, driving job creation and economic growth rather than enriching foreign investors.

For Ethiopian entrepreneurs, this is a rare opportunity. Instead of competing against a foreign-backed player with millions in outside funding, local businesses now have a chance to develop their own battery-swapping solutions, secure funding through EIH’s upcoming venture capital fund, and manufacture EV components rather than rely on imports. This isn’t just about job creation—it’s about ensuring Ethiopia captures the financial rewards of its own electrification efforts. If Ethiopia can develop a domestic battery-swapping infrastructure, it proves that it can compete across other high-tech industries as well.

Some may argue that rejecting Dodai was a risk, but the real risk would have been allowing foreign players to dictate Ethiopia’s EV future. The playing field is now open, the demand is there, and the potential is massive. Ethiopia has spent too long as a passive player in global markets—this is the moment to take control. The world is moving toward electric mobility, and Ethiopia must ensure that it is not just a customer in this transformation but a producer. The opportunity is here. Now is the time to build Ethiopia’s EV future on its own terms.