How to win in Africa’s EV race
Electric buses and motorcycles have found a winning formula in Africa, while electric personal cars and battery-aided pedal bikes are stuck in the slow lane.
The Rwandan capital Kigali will this month receive its first electric buses from BasiGo, the Kenya-based startup omnibus purveyor.
This comes weeks after Kenya welcomed its first locally-made e-bus introduced by Roam.
Why it matters: Electric buses and motorcycles have found a winning formula in Africa, while electric personal cars and battery-aided pedal bikes are stuck in the slow lane.
Notable examples: EV infrastructure is growing especially fast in the motorcycle space.
Kofa & TAILG aim to build 200,000 e-motorcycles and 5,000 battery swap stations.
CrossBoundary Access and Mobile Power announced a $10 million partnership to scale battery swapping in Nigeria.
By contrast: Few Teslas are parked by the side of Saharan roads, and almost nobody pedals a bike uphill supported by a battery. Why is that?
The landscape: It helps to grasp how Africa differs from wealthier continents.
Ubiquitous battery-charging infrastructure has so far proven too expensive.
African buyers are even more price-sensitive than in the rest of the world.
Public transport, including motorcycle taxis, vastly outweighs car ownership.
The winners: African EV companies that are gaining investor interest and market share have managed to finesse these tough conditions.
They’ve chosen a battery-charging model that adapts to local circumstances.
Sought out buyers who are attractive for leasing and other financing models.
Focused on the largest segments in public transport – buses & two-wheel taxis.
Clever charging: Infrastructure for topping up batteries will remain limited. And charging times at mostly low-voltage stations will remain long.
Successful EV companies responded by reducing complexity. They focused on vehicles operating on fixed routes (ie public transport).
They offered either charging only at end points such as bus depots. Or they created stations to swap out rather than charge batteries (practical for motorbikes but not cars).
Smart financing: EV upfront costs can be high. That inspired new financing models such as pay-as-you-drive. Again this favours public transport with its recurring income streams.
BasiGo CEO Jit Bhattacharya said, “The secret is combining financing, charging and maintenance, which allows us to offer a superior product and return on investment."
Climate impact: The continent’s transition to EVs matters beyond what most realise.
A majority of AU nations use low-quality fuel standards predating 1992.
That makes transport a disproportionate contributor to emissions in Africa.
About 1.1 million die annually as a result, ranking second only to malnutrition.
Rising tide: There is hope. The EV sector is enjoying favourable winds.
Rising fossil fuel prices (due to Ukraine & Israel) boost EV attractiveness.
A number of African countries have also started phasing out fuel subsidies.
Government policies including tax & import duties are becoming more EV friendly.
Reality check: Significant challenges still lie ahead though.
Electricity prices have recently risen in many African countries due to dire public finances. That impacts the cost-effectiveness of electric vehicles.
The international price of used petrol vehicles will drop as the rest of the world phases them out. That makes EVs less attractive.
Car catch-up: One day, says Fred Mutitika at BasiGo, the growing prominence of electric buses and motorcycles might enable electric cars and bikes to overtake.
If public transport proves EVs dependable and affordable, individual consumers may be tempted to follow suit and hang up the fuel pump forever.