Africa’s EV revolution will roll in on two wheels, not four

Electric motorbikes could be only a couple hundred dollars more expensive than conventional motorcycles, which are ubiquitous in Africa.
Electric motorbikes could be only a couple hundred dollars more expensive than conventional motorcycles, which are ubiquitous in Africa.
Image: Reuters/Noor Khamis
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Adetayo Bamiduro didn’t set out to fight climate change in Africa’s mobility sector. His goal was to help professional drivers access and earn more from delivery and passenger gigs by owning their own vehicles. The core product of his Lagos-based startup, Metro Africa Xpress (MAX), was lease-to-own vehicle financing, especially for motorcycles. There was just one problem: His customers hated the bikes, mostly imported from China.

“We bought vehicles off the shelf, and we got pretty terrible feedback from the drivers,” he says. “The vehicles are not designed for use cases in Africa. They didn’t have range, couldn’t manage heavy loads. But when we tried to engage with manufacturers, they weren’t willing to make design and production changes.”

Bamiduro’s solution: Build his own bikes. As it turned out, the easiest kind to build was electric, using locally-sourced parts and imported batteries. The M3, MAX’s newest motorcycle model, has reinforced suspension, a battery range of up to 100 miles, and built-in USB ports for phone charging. It costs about $2,000, more upfront than a comparable gas-fueled motorcycle. But Bamiduro says that monthly gas and maintenance are 25% below conventional bikes, and that the price difference can be offset in two to three years.

“Originally we had no intention to do EVs, but we actually had no choice,” he says.

In December, MAX closed a $31 million fundraising round co-led by Global Ventures and London-based private equity firm Lightrock, its first investment in an African mobility company. Bamiduro’s goal is to expand into Ghana and Egypt in early 2022. Electric vehicles are still vanishingly rare across most of the continent. But as production costs fall and the price of oil rises, a growing number of investors and governments are looking to nurture the nascent EV market. And like MAX, many are focused not on cars, but on two- and three-wheeled vehicles.

Motorcycles and tuk-tuks will lead EV adoption in Africa

Globally, sales of electric vehicles doubled from 2020 to 2021, up to a record 6.3 million. In Europe, with the world’s top adoption rate, one-fifth of passenger vehicles sold in 2021 were electric, according to Bloomberg. The price of EVs is falling, and tens of trillions of dollars of venture capital are pouring into electric mobility startups. India’s aspiring EV giant, Ola, has spun off its EV manufacturing business into a $3 billion company, highlighting the EV potential for lower-income countries.

In Africa, that revolution is just beginning. Data are scarce, but paint a grim picture. In South Africa, only about 1,000 of the country’s 12 million vehicles are EVs. In Kenya it’s about 350 of the country’s 2.2 million cars.

Yet several governments have big plans for expansion—as a means of job creation, to help with urban air pollution, and to facilitate the rollback of costly fuel subsidies. Kenya wants 5% of car imports to be EVs by 2025, and is cutting EV import duties in half. Ghana, Rwanda, Seychelles, and Mauritius have also rolled back import fees. Egypt plans to manufacture 20,000 EVs domestically per year starting in 2023. Namibia wants 10,000 EVs on the roads by 2030; South Africa is shooting for 2.9 million by 2050.

Meanwhile, dozens of startups are working to capitalize on those ambitions, including many focused either on public transit buses or on motorcycles and tuk-tuks (and in one case, fishing boats on Lake Victoria). In Kenya alone there are at least 50 startups working on two- or three-wheeled EVs, according to the UN Environment Program.

“Two- and three-wheelers are where there’s a massive opportunity, and where the activity is concentrated,” says Rose Musito, research director at Energy for Growth Hub, a think tank focused on Africa’s energy transition. 

Small vehicles are poised for high growth for a number of reasons. Most cars on the continent are imported, pre-owned, expensive, not up to the latest fuel efficiency standards, and in need of routine maintenance. As a result, motorcycles—less expensive, more durable, better maneuvered through traffic and over low-quality roads—are already the largest and fastest-growing segment of the African vehicle market, Musito says.

And although they are more fuel-efficient than cars, they are so numerous and used so often that the total carbon footprint of motorcycles on the continent matches or exceeds that of cars, according to the UN Environment Program, making them a ripe target for climate action. Compared to cars, electric motorcycles are relatively straightforward and low-cost to manufacture locally, with batteries still imported from China (also an enthusiastic adopter of two-and three-wheeled EVs) or upcycled out of used EVs from the US, Europe, or Asia, UNEP’s Alex Koerner says. That means they can avoid sky-high car import tariffs, and ultimately be only a couple hundred dollars more expensive than a conventional motorcycle, Koerner says—a much smaller price gap than that between gas- and electric-powered cars.

“The difference in taxation alone could already cover a big part of the gap in cost between conventional and electric [two- and three-wheeled] vehicles,” Koerner says.

Bumps in the road for electric motorcycles in Africa

But even that price gap may be too great for many vehicle shoppers, Musito says. Data from the continent’s existing motorcycle market suggests that buyers are extremely price-sensitive. And although electricity may be cheaper than fuel, Africa as a whole has the world’s most expensive and least reliable electricity, and more than half of the population has no access to electricity at all.

Most power utilities are already buried in debt and not well-positioned to build thousands of charging stations or handle a big new source of demand. Workarounds like solar charging stations and battery swapping (rather than recharging one battery) could help, but also add to the overall cost. Bamiduro says excessive bureaucratic red tape and supply chain delays due to bad infrastructure are also routine headaches.

For now, Musito says, it’s fair to be skeptical about the growth potential for EVs, no matter how appealing they may seem.

“I’ve been watching the off-grid solar space for so many years,” she says. “The argument to use it is so good. And we’ve seen growth—but not the kind of growth that the opportunity would imply.”

As both the price of fuel and climate tech funding from governments and private investors continue to rise, Bamiduro is betting EVs have a more promising future.

“It’s not easy but it’s easier than it was before,” he says. “There’s a shared view that this is the time to double down, that innovators need to scale up EVs and enable transitions away from ICE engines.”

This post was updated with new pricing data on the MAX M3.

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