Globally, countries are on track to phase out the use of fossil fuel, and Electric Vehicles are the vital technology to decarbonise road transport, a sector that accounts for 16% of global emissions. The use of Electric Vehicles (EVs) is widespread in many developed nations, but its adoption in Africa is still at an embryonic stage.
South Africa is the current leading market for EVs in Africa. Yet in 2020, there were just a little over 6,000 EVs on South African roads and all EVs, including hybrid models, accounted for less than 0.2% of new car sales out of a total fleet of 12 million automobiles. In Kenya, the number of EVs was estimated at 350, while some 2.2 million registered vehicles were likely in use in the country.
Although these numbers are not huge, it represents significant growth showing electric vehicle sales on the continent are rising. This is due to a host of factors including the government’s intervention to foster easy adoption of this innovation. Many African governments are introducing tax cuts and other incentives to boost the e-mobility industry and drive the demand for eco-friendly vehicles in their countries.
The Kenyan government is a model for this. For example, Kenya Power, the country’s sole power supplier has lofty plans over the next four years to convert 2,000 gasoline – and diesel-powered cars and trucks to electric power. In line with this plan, it has an installed generation capacity of 3,321 megawatts (MW), versus peak demand of 2,132 MW and off-peak demand of roughly 1,100 MW.
In 2020, the government stated that it could require real estate developers to incorporate electric car charging stations between 2020 and 2025. While we can not say with certainty if this has scaled, there are signs of considerable adoption already. Reportedly, there has been an increase in charging stations for electric vehicles in Nairobi, the country’s capital. As EVs are becoming more popular, there is also an increase in the charging infrastructure set up by electric mobility businesses.
The country intends to boost this uptake between now and 2025 to increase the number of electric vehicle imports to 5% of total imports. This would mean increasing the number of imported electric cars to about 16,000 per year. The government through the National Treasury has also reduced the excise duty on fully electric cars to 10%, down from 20%. This obviously makes the purchase of electric vehicles attractive to buyers.
Kenya is becoming a hub for e-mobility startups.
For a while, Kenya has been an active player in Africa’s renewable energy space, so the transition to cleaner and renewable transportation modes is understandable. Lacking the oil, gas and coal deposits abundant in some parts of the continent, over 90% of the country’s power comes from renewable energy sources like solar, wind and geothermal. However, Kenya’s transport sector relies entirely on imported petroleum fuels.
Since this is changing with the aforementioned government activities, the country is gradually becoming an investment hub for e-mobility startups. This has sent a positive signal to investors who have started exploring renewable transportation modes for the convenience of Kenyans.
From Roam Motors (formerly Opibus) to BasiGo, the e-mobility landscape in Kenya is growing, with players offering different e-mobility services.
Roam Motors, as their maxim goes, is electrifying Africa, one vehicle at a time. Last September, the startup kicked off the production of Kenya’s first all-electric bus, equipped with a 384-kWh battery pack that should enable a range of 360 kilometres. The startup also produces electric motorbikes, which are offered to people through affordable payment plans. Its partnership with African financing platform M-Kopa affords the company to sell electric motorbikes on credit, lowering customers’ barriers to entry through affordable payment plans.
Similarly, in bringing clean energy options to Kenya’s public transport industry, BasiGo sells locally assembled electric buses in the country. Like Roam Motors, the startup operates with an innovative financing model to make ownership attractive and affordable to customers. Because of the initial acquisition cost, it allows its customers to purchase its EV buses at the price of their diesel equivalents while offsetting the balance through usage-based subscription fees.
To scale their operations, Roam motors and BasiGo raised $7.5 million and $6.6 million in funding last year. This indicates that the e-mobility ecosystem in the country is becoming more attractive to investors.
The growth of this budding ecosystem opens the country to massive environmental and economic benefits. Due to increasing human activities, the country suffers from its share of air pollution. According to IQAir, PM2.5 concentration in Nairobi air is currently 1.3 times higher than the WHO annual air quality guideline value. And the major source of this pollution is the combustion of certain materials and the mass movement of people and goods, i.e transportation. Consequently, at least 18,000 Kenyans are estimated to die from air pollution annually. Transitioning to electric-powered vehicles could be a resolve to this problem.
From an economic point of view, asides from Foreign Direct Investment (FDI) into the country, local manufacturing of EVs can also provide jobs to unemployed Kenyans. The growth of e-mobility in Kenya and Africa generally is a marathon, not a sprint. And because the ecosystem is still largely unexplored, it is bound to receive a host of new players, making the ecosystem limitless.