Electric Vehicles (EV) are fast becoming a mainstay of daily commutes around the world. From battery-powered vehicles to electric public buses, we are on the precipice of a revolution in the automotive industry. Africa is not excluded in this new movement with burgeoning sectors looking to change the way African cities move – and breathe! FORBES AFRICA looks at how the EV market is moving in East Africa.
By MARIE SHABAYA
IN THE QUIET TOWN OF RUIRU, IN KIAMBU COUNTY, 15 miles east of Nairobi, a quiet revolution is underway. Fika Mobility, a startup within Kenya’s budding electric vehicle sector, has been assembling electric motorcycles there for almost two years now. These early prototypes are currently in use around the town and parts of Nairobi, where boda boda, commuter and freight motorbike riders, are seeing massive changes to their bottomline due to the energy efficiency of the electric bikes.
“If you look at what boda riders take home, they actually work 12-15 hour days… it’s very competitive and they take very little home. I only began to appreciate this when I started our research, two years ago. We realized that one of the reasons for that was increasing fuel prices and… huge maintenance costs for the engine. Going with an EV [motorcycle] they are immediately saving upwards of 40% of petrol and even more on maintenance,” says Rishi Kohli, CEO and one of the founders of Fika Mobility.
Born out of a passion to make an impact in all his ventures, as has been the theme of Kohli’s entrepreneurial career, Fika Mobility is on the road to doing just that. His bikes are renewable end-to-end, with solar-powered charging stations taking advantage of Kenya’s sunlight hours. They cost approximately $1,200, equivalent in price to local fuel- powered alternatives and are inclusive of a battery pack which can be swapped, for even more efficiency for the fast-moving boda business, at one of their branded charging stations.
From there, we started working with governments on what kind of policies we need to encourage cleaner, more efficient vehicles including electric mobility.
– Jane Akumu, Programme Officer at UNEP’s Sustainability Mobility Unity
As this global sector develops, Africa is still lagging behind but the movement is promising.
Countless countries within the continent rely on used car imports, most of which are at least seven years or older. The age of these vehicles has contributed to rising air pollution in Africa’s cities.
This is costly both for health and economic growth with a recent United Nations Environment Programme (UNEP) estimating that cities, across the continent, are losing an estimated 2.7% of GDP, annually, due to rising fuel emissions. At the same time, worsening air pollution has caused over 176,000 deaths per year, according to a 2012 report from the World Health Organization.
Another concern is policy development within the sector. According to Jane Akumu, Programme Officer at UNEP’s Sustainability Mobility Unity, there are efforts underway to aid the transition to better fuel economy across the region.
“We’ve been supporting the sub-region since 2010 mainly from one of the projects that we have as part of the Global Fuel Economy initiative to support countries to incentivize the import of more efficient vehicles. We support countries like Kenya, Uganda, Rwanda… to look at what kind of vehicles were being imported into that region… many of them were very old, some of them over 20 years old being imported into the region. From there we started working with governments on what kind of policies we need to encourage cleaner, more efficient vehicles including electric mobility.”
This included a collaboration with Kenya’s industrial standards bureau, KEBS, to spell out some early policy standards for the importation of some of these vehicles as well as those manufactured within the country. This movement also included the licensing of local manufacturers within the EV sector to convert fuel buses, traditionally used in the tourism industry, to electric power.
One of the two companies certified to do this in early 2020 was Opibus, a Swedish-owned EV company based in the heart of Nairobi’s industrial district.
Founded in 2017, the company has a bold vision for African commuters, placing themselves in the heart of the market just as it was taking off. With a goal to make EVs more accessible to mass market consumers, Opibus has a vision to lower costs and simplify deployment for these vehicles, across Africa. However, for now, their impact is mostly felt in East Africa.
“We have a test production line, which is the first iteration of [our] production lines… we have conversion systems which we are
implementing now in public transport and commercial vehicles, we go for them because of their high initial impact which motivates the high initial costs [of conversion]. We take old vehicles and take out the engine and the fuel tank and replace it with a large battery and control system at the front and replace batteries where the fuel tank was. This gives older used vehicles a new cleaner, efficient and cost-effective life,” says Albin Wilson, Chief Marketing Officer at Opibus.
The company, like Fika Mobility, also seized on the growing opportunity for electric motorbikes in the East African market, using their expertise in conversion technology to add to their product line. Hot off the heels of the start of COP26, Opibus announced the closure of a funding round that raised $7.5 million, the largest investment seen in sub-Saharan Africa’s still growing EV sector, to date. Some of that fund will bolster production of their motorcycle range which might set them on the road to being a leader within that market segment.
“We’ve launched a total of 170 [motorbikes], in pilots, and we’re looking to supplement [production] with the new funding we’ve recently raised,” he says.
However, as it currently stands, despite ongoing upward mobility for the sector, policy bottlenecks, both at the port and within the market, may hinder future growth. This is the view Alexander Koerner, Programme Officer at UNEP Sustainability Unit, takes.
“There are areas of regulation that need to be updated in order to incentivize this market. These markets need to be ready to receive these vehicles. There are very simple things, for example, the paperwork you need to fill when you import a vehicle that needs to be adapted to electric vehicles. Depending on how the countries are taxing these vehicles, there needs to be a tax base like a customs value for EV, based on realistic values from the origin country. These need to be based on their country of origin… to determine the value [of tax],” he explains.
Outside of customs regulations, he also notes other aspects that would allow for an enabling policy environment. At the higher-level, this means policymakers ruling on the types of EVs that they would want on their country’s roads, infrastructure and regulation on charging, and matching these to the standards in the country of origin for imported vehicles.
However, the onus isn’t just on policymakers alone to make this work. Returning to Kohli, and his vision for electric motorbikes in Kenya, he reveals that private sector players also must have a say in how the sector should be regulated as it grows.
“This whole thing has to come [together] as a circle. There has to be alignment from everybody; us, as operators, private and public sector [as well]… and I think we will make traction and [change] will come,” he says.
On that note, East Africa’s EV sector looks to be growing from boom to boom, regardless of policy barriers and the strained economic environment that the Covid-19 pandemic has ushered in. Looking forward, if all things stay constant, it might even shape up to be the new darling of investors across the continent and the world for years to come.