✦ How to bring EVs to Africa

✦ How to bring EVs to Africa
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The world’s roads are increasingly populated by electric vehicles, and Africa is no exception. But while the booming EV market in the US and Europe is dominated by cars, in Africa the hottest emerging opportunity is for electric motorcycles and tuk-tuks.

Two- and three-wheeled EVs are well-positioned 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, says Rose Musito, research director at Energy for Growth Hub, a think tank focused on Africa’s energy transition.

Although they are more fuel-efficient than cars, motorcycles and tuk-tuks are so numerous and used so often that their total carbon footprint on the continent may exceed 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. That means they can avoid sky-high car import tariffs, and ultimately be only a couple hundred dollars more expensive than a conventional motorcycle—a much smaller price gap than that between gas- and electric-powered cars.

Dozens of startups around the continent are now working on two- and three-wheeled EVs—including Lagos-based MAX, which has placed electric motorcycles at the heart of its broader goal to make vehicles more accessible, especially to delivery and gig-economy drivers.

Cheat sheet

💰  The opportunity: Because vehicles are such a large source of carbon emissions and air pollution, numerous governments in Africa have created tax incentives for companies that manufacture EVs and for drivers who buy them. The high price of gasoline, brought on by the war in Ukraine, makes the economics of EVs even more attractive.

🔌  The challenge: EVs are still more expensive upfront than conventional vehicles, and the global supply chain for batteries is convoluted and subject to disruption. For drivers to overcome “range anxiety,” they’ll also need a widely distributed network of charging stations that in most countries doesn’t yet exist. Electricity itself is often expensive and unreliable—so governments that want more EVs also need to upgrade their grids.

🔧  The road map: One way to keep import costs low is to assemble EVs locally, so companies need to invest in designers and engineers who understand local driving habits and needs. They also need to get creative with financing—possibly through leasing, or discounted insurance—so customers can overcome sticker shock.

🌍  The stakeholders: At this early stage, Africa’s EV market needs a lot more government support. More countries need to cut red tape, carve out tax and import tariff exceptions for EVs, and invest in R&D and charging infrastructure. EVs should also become a more prominent target for climate-related aid coming into Africa from the US and Europe.

By the Digits

~15 million: Two- and three-wheeled vehicles currently in use in Africa

0.05%: Share of vehicles that are electric in South Africa, the continent’s biggest car market

721 million metric tons: Carbon emissions that could be avoided by 2050 with widespread adoption of EVs in Africa, roughly equivalent to the carbon savings of building 200,000 wind turbines

50: Startups working on two- and three-wheeled EVs in Kenya alone, according to UNEP

$100 million: Annual funding needed from international governments and aid organizations to scale EV adoption in Africa to 10% of total vehicle sales by 2027

25%: Operation and maintenance cost savings per month for an electric motorcycle relative to a conventional one, according to MAX

1.5-1.8: Batteries MAX needs to stock per motorcycle it leases, so that drivers can swap dead batteries rather than wait for them to recharge

The case study 

Name: Metro Africa Xpress (MAX)
Founded: 2015
HQ: Lagos, with a staff of 350 across eight cities in Nigeria and Ghana. Expansion is planned for East Africa and Egypt.
Founders: Adetayo Bamiduro and Chinedu Azodoh
Latest valuation: Undisclosed

MAX wasn’t founded as an EV company. Its main goal was, and is, to help professional drivers access and earn more from delivery and passenger gigs by owning their own vehicles. The company’s core product is lease-to-own vehicle financing, especially for motorcycles. But founder and CEO Adetayo Bamiduro said there was just one problem: His customers hated the bikes, which were mostly imported from China. They had short ranges and struggled with heavy loads, and manufacturers weren’t willing to make 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 lower monthly gas and maintenance can offset the price difference in two to three years.

Today, EVs account for only about 600 of the company’s fleet of around 8,500 vehicles, Bamiduro said. But that’s hundreds more than just a few months ago, as the company taps $31 million in private equity investment it secured in December to import batteries from China and assemble its custom vehicles in Nigeria. MAX’s goal is to make half its fleet electric in the next two years.

One of MAX’s main competitive advantages over other EV producers, Bamiduro said, is its subscriber database, which holds insights into the driving patterns of more than 13,000 users that it can use to make decisions about vehicle design and charging station placement.

In conversation with

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Adetayo Bamiduro is MAX’s founder and CEO. Here are some choice quotes from our conversation:

Why is now the moment for more drivers in Africa to go electric?
“The cost of fossil fuel energy is going through the roof. So beyond the pollution issue, EVs are just good for our drivers. It’s in Africa’s best interest overall to reduce emissions in the mobility space and transition very quickly to electric mobility. The trend is toward electrification globally, and there’s no reason they shouldn’t get access to this technology now. It makes economic sense now.”

What are the biggest obstacles you see to more EV adoption?
“Not enough political action. A lot of work needs to be done on unlocking capital for infrastructure. Range anxiety is very important for the kinds of commercial drivers we serve, so they need access to charging networks, and they need credit. And the driving experience needs to be at least as good: A driver isn’t going to transition if [the EV] breaks down or runs out of juice.”

What about supply chain issues?
“We need to be able to get 20,000 batteries very quickly. But to deliver EVs at scale, the supply chain is absolutely insane, especially in our fragmented world. Between the pandemic and conflicts, the gains of globalization are being rolled back right before our eyes. But going electric is undoubtedly the future.”

More from Quartz

🛵  Africa’s EV revolution will roll in on two wheels

🇨🇳  The future of electric cars is China

🔋  Lithium was the hottest commodity of 2021

🎵  This brief was produced while listening to “Enta Omri“ by Umm Kulthum (Egypt)

Have a highly motivated rest of your week,
—Tim McDonnell, Cairo-based, Quartz climate change correspondent

One 🛥️  thing

It’s not just motorcycles going electric—one Dutch startup is working to bring electric fishing boats to Lake Victoria. The company, Asobo, aims to replace 5,000 diesel boat engines with electrics in the next five years.