Yesterday the Powering Renewable Energy Opportunities (PREO) programme launched a new report shining a spotlight on e-mobility innovators in sub-Saharan Africa.
Electric motorcycles are starting to shape the transformation of mobility in sub-Saharan Africa. The current market estimate for e-motorcycles is US$3.65bn in the sub-Saharan region alone. However, there are some barriers that start-ups across the value chain will have to address in order to maximise the full potential growth of this industry, according to a report released by PREO.
The reason behind the demand for e-motorcycles is that they are quicker and more easily manoeuvrable than four-wheeled vehicles, especially across sub-Saharan Africa, where countries often have poor-quality roads.
“Investing in e-motorcycles provides a path to more sustainable and equitable growth across African communities and addresses the urgent issue of climate change,” says Jon Lane, Programme Director at PREO.
The Charging Ahead – Accelerating e-mobility in Africa report from PREO outlines the market opportunity for e-motorcycles to become a driving force in the African e-mobility sector as, according to analysis by Mordor Intelligence, the market value for motorcycles in Africa was worth US$3.65bn in 2021, and is projected to grow to US$5.07bn by 2027.
However, to accelerate progress in the e-mobility sector and meet the demands of a rapidly expanding customer base for two-wheelers, there are a number of challenges that need to be addressed. These include improving the availability of durable hardware, reliable charging infrastructure and access to high-quality battery solutions.
Powering Renewable Energy will be hosting a webinar tomorrow on accelerating e-mobility in Africa. PREO has supported three e-mobility companies across Sub-Saharan Africa and we will get the opportunity to gain valuable insights from them.— Association for Electric Mobility & Development (@AfricaEMDA) March 27, 2023
Register here https://t.co/FW2G9NxX17 pic.twitter.com/g6PEGorYre
📢Just 1 day to go until @PREO’s report launch webinar featuring a panel of experts & innovators who are transforming #emobility in Africa. Sign up here for 'Charging Ahead: Accelerating e-mobility in Africa' on Tuesday 28 March @ 13:00-14:00 UTC +1 👉https://t.co/l8q3BUCVGG pic.twitter.com/W6VoI3t84Z— Energy 4 Impact (@Energy4Impact) March 27, 2023
Challenges facing e-motorcycle industry
Some of the other challenges facing the e-motorcycle industry in sub-Saharan region are as follows:
- Lack of charging infrastructure
- 90% of electric motorcycles sold in sub-Saharan Africa are built in India and China, not durable for African conditions
- Poor electricity access and not enough support for renewable battery charging networks
- Big companies leave small start-ups out of the picture
The Charging Ahead – Accelerating e-mobility in Africa report looks at how to successfully address each of these barriers by illustrating a case study of three PREO-supported companies – Roam (previously Opibus), Mobile Power and Zembo – coming up with solutions that will enable and accelerate progress across the entire e-mobility sector.
Roam addressing durable hardware
Roam is a Swedish-Kenyan company that manufactures robust electric motorcycles in Kenya. The company is demonstrating that with the support of local manufacturing and assembly, the final price of electric motorcycles can be lowered to compete with ICE (internal combustion engines) vehicles while also customising the product to local conditions. Roam has now acquired the capacity to fully design the vehicles and manufacture 35% of them in-house with a goal to reach 70% in the next three to five years.
“With the support from PREO we were able to accelerate and validate our product-market fit, refine our business models and design our next-generation electric motorcycle that is now ready to scale. PREO’s grant subsidised our early-stage production costs for pilots, and ultimately helped us reach commercialisation of a product that puts more earnings into end-users’ pockets and creates a positive environmental impact,” says Filip Lövström, co-founder and Chief Executive Officer of Roam.
The company plans to expand beyond Kenya to other African markets through strategic partnerships. It aims to raise US$17.5 million in equity and debt for working capital and hopes to supply Uber with 3,000 electric motorcycles for its delivery services across sub-Saharan Africa.
Zembo looks into reliable charging infrastructure
Ugandan company Zembo has developed a solution to enable the roll-out of e-motorcycles in areas with weak and unreliable access to electricity by using solar energy to charge the batteries.
“We’ve already proved that our business model is profitable in urban on-grid areas. Now, this PREO-co-funded project will give us the opportunity to prove that our solar-powered solution is viable and replicable in off-grid areas as well. We’ll then be in a strong position to unlock private investments to expand to other African countries,” says Étienne Saint-Sernin, co-founder of Zembo.
In Uganda, Zembo operates 27 battery-swap stations for electric motorcycles and is considered one of the largest networks in the region. It sells motorcycles to taxi operators on a pay-as-you-go basis and provides batteries-as-a-service through its battery-swap network. 73% (personnel cost = 55%, rent = 18%) of the monthly cost of operating a swap station is fixed cost in nature, delaying profitability and slowing down expansion.
Zembo’s scale-up strategy involves expanding its network using risk-sharing mechanisms such as franchisee models, and reducing personnel costs by deploying automatic swap cabinets. The company is also installing solar power solutions for off-grid areas and hybrid power for on-grid areas with weak or unreliable grids. This will enable batteries to be charged even in areas that are not on the grid and during grid blackouts. Zembo plans to expand its fleet to more than 2 000 motorcycles and 60 swap stations by 2025.
Mobile Power brings high-quality battery solutions
Mobile Power operates in Sierra Leone, Liberia, the Democratic Republic of Congo and Nigeria. They are tackling the scarcity of high-quality battery technologies for small-scale businesses. The company has developed clean energy storage products (lithium-ion batteries) that it offers to businesses and individuals through a rental model. Since 2017, Mobile Power has grown its rental business to 500,000 rentals every month and is gaining 2,000 new customers every week at its peak growth periods.
Mobile Power is now replicating its rental model in the mobility sector and generator replacement sector by leveraging the same technology components: batteries, battery management systems and battery charging hubs. The company has now reached a stage whereby it can manufacture robust batteries tailored to African conditions at scale for its in-house use and satisfy the demand of its electric mobility peers. Mobile Power’s pay-per-use battery-swap model enables customers to access the service based on their needs.
Have you read?
Kenya’s Electric Bus Market Set To Boom In 2023
“PREO’s support has been incredibly valuable to us for de-risking our battery technology and business model. It has enabled us to grow and increase the rate of scale for the e-mobility business and capture learnings that now form the basis of future technology solutions we have in the pipeline, even beyond e-mobility. As a result of this PREO project, we are now in discussions with several new partners across the value chain, which will be announced in due course,” says Jono West, co-founder and Chair of Mobile Power.
PREO is funded by the IKEA Foundation and UK aid (via the Transforming Energy Access platform), and is delivered by the Carbon Trust and Energy 4 Impact. To date, it has supported 27 productive-use-of-energy enterprises across 11 countries in sub-Saharan Africa, four of which are in the e-mobility sector.
“Through our work with several start-ups, we have identified opportunities for a full ecosystem of solutions that address challenges across the value chain. We hope this report demonstrates the impressive progress being made by companies in the e-mobility sector and will act as a call for investors, policymakers and partners to engage and collaborate to help meet the scale of the challenge,” says Lane.