May 25, 2024
A great opportunities for battery swapping companies develop in Africa
Motorcycles in Africa are the main way for people to travel, not only for personal transportation, but also extended out of the motorcycle network about services.
In Kenya, Africa’s largest motorcycle market, nearly a tenth of the population relies on motorcycles for their livelihood, and the East African nation of Rwanda has more than 100,000 gasoline-powered motorcycles, and motorcycles account for 60% of all passenger traffic.
Explore the top 10 electric motorcycle manufacturers in Africa.
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Market conditions
Large base of commercial passenger electric motorcycles
According to the FIA Foundation, the number of registered motorcycles in sub-Saharan Africa has grown from 5 million in 2010 to 27 million by 2022, of which about 80% are used in the motorcycle cab industry.
In Africa, where road conditions are backward and residents’ incomes are low, motorcycles are not only a private means of transport, but have also become an important part of local public transport.
Especially with the development of motorcycle taxi services, the African motorcycle market is ushering in a huge opportunity for development.
In Kenya, the largest motorcycle market in Africa, 5.2 million people are engaged in motorcycle transportation services (about 1/10 of the total population).
Driving factor
Cost saving
International oil prices have risen rapidly in recent years, and the Russia-Ukraine conflict has led to further increases in oil prices.
Compared to the cost of a fuel motorcycle, which is about 30 cents per kilometer, an electric motorcycle costs only 3 cents per kilometer. This suggests that consumers who buy electric motorcycles can make money back within a year.
Guidance from the State
| Country | Policy/initiatives |
|---|---|
| Rwanda | In August 2019, Rwanda's president expressed hope that all motorcycles in the country would soon be electrified |
| Benin | Electric and hybrid motorcycles manufactured or sold in Benin are exempt from customs duties and VAT from 1 January 2022 |
| Kenya | In 2023, the United Nations Institute for Training and Research (UNITAR) partnered with a group of Kenyan banks to launch a green mobility program that promotes the use of electric motorcycles |
| In June 2023, Kenya's president signed a bill that included "exemption from excise tax on locally assembled electric motorcycles." |
Supply of clean energy
Take Kenya, Africa’s largest electricity market. Kenya’s continuous electricity supply is about 95% renewable energy, dominated by hydroelectricity, and has an extensive power grid.
The country’s electricity utility estimates that it generates enough electricity to charge 2 million electric motorcycles per day: according to the World Bank, the country’s electricity supply is over 75%, with Nairobi having an even higher rate.
Business model
Make sustained profits from battery swap stations
Batteries are the most expensive component of an electric motorcycle, so reducing this expense can greatly reduce the financial strain on the rider. Combined with the fact that local electric motorcycles are mainly used for commercial purposes, the cost of time is particularly important. You can also check the top 10 battery swapping companies in Africa for your reference.
For this reason, local companies have chosen to build a model of battery swap stations. Riders can go to a power exchange station to replace an undercharged battery with a fully charged one, which takes only 2-3 minutes, without recharging the battery, and they only need to pay about 300 shillings (about US$2) each time they change batteries, which is usually only twice a day (about US$4). ).
A number of companies incoming
More than 50 startups are active in this region of East Africa alone.
Uber launched its electric motorcycle service in Kenya in 2022, the company’s first electric motorcycle service in Africa. Three thousand electric motorcycles are planned.
Africa’s homegrown e-motor company, Spiro, currently has 6,000 electric motorcycles in three African countries, building battery swap station across the country.
Opportunities for Chinese companies
Joint ventures with local companies
From June 27th to 28th, the Minister of Foreign Affairs and Ambassador of the Republic of Benin visited Changzhou, and Spiro Benin signed a contract with Horwin of China.
The plan is to sell 500,000 electric motorcycles in Africa over the next five years, totaling $1 billion, with business segments covering emerging markets such as Benin, Uganda and Kenya. Horwin has reached a strategic cooperation with Spiro, a local African electric vehicle company, to jointly develop the African market in 2022.
Spiro is Africa’s largest electric vehicle platform with more than 6,000 electric motorcycles and scooters, which is expected to exceed 30,000 by the end of 2023, and has signed exclusive cooperation agreements for new energy electric vehicles with several African countries including Benin, Togo and Rwanda.
Sum up
At present, the global electric motorcycle market is mainly concentrated in Southeast Asia. Many electric two-wheeled companies have entered the game, hoping to gain market share in Southeast Asia. Therefore, they want to stand firm in such an “involutional” environment, naturally, also on enterprise products, and their own strength has a greater challenge.
Read more: top 10 electric motorcycle manufacturers in South Asia, top 10 battery swapping companies in Southeast Asia.
Compared with Southeast Asia, the electric motorcycle market in Africa is still in its infancy and is a promising market”. In Africa, motorcycles are a livelihood for local people, and market demand is expected to remain stable.
Electric motorcycles are convenient and cost-effective alternatives. Future development momentum should not be underestimated.
Coupled with the fact that many governments are interested in promoting the transition from oil to electricity, and are even beginning to cooperate with electric motorcycle companies, the local electric motorcycle market has been further boosted.
According to a recent McKinsey & Company analysis, the electrification of mobility in the five largest automotive markets in sub-Saharan Africa (excluding South Africa) will reach 35% by 2040, and electric motorcycles, as the most representative means of transportation in the region, will play a leading role in this change.
China, as the main importer of African electric two-wheelers, for Chinese enterprises, timely entry, through cooperation with local electric motorcycle enterprises to enter the African electric motorcycle market, is not a good opportunity.
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Nancy
Nancy has worked hands-on with battery swap infrastructure for electric two- and three-wheelers since 2021, including deployment projects in South Asia. She regularly consults on EV fleet electrification and has contributed technical specifications to multiple swapping station manufacturers. Her market analysis is grounded in direct collaboration with importers, dealers, and RMV registration data.
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