Last updated: Feb 15, 2023
The Org spoke with the founders of Ampersand, BasiGo and Solar Taxi to learn more about opportunities surrounding Africa’s e-mobility market in the year ahead, and what it takes to scale a hardware-heavy startup.
When Tesla launched its Roadster sports car in 2008, it proved that energy-efficient vehicles don’t have to be a future aspiration. The only problem was price: Roadsters originally retailed for north of $100,000. The market has evolved in the 14 years since, and electric vehicle (EV) costs are falling, making them viable to produce at scale and more accessible for drivers.
Africa presents a massive opportunity for EV startups developing rapidly to decarbonize transportation and provide an alternative to rising fuel costs. As the continent urbanizes, demand for greener transport alternatives is on the rise. Roughly 10% of Africa’s greenhouse emissions come from the transport sector, but this number will increase if more people move to cities — and infrastructure must be built to support an African e-mobility boom.
The Org spoke with Ampersand, BasiGo and Solar taxi — three dynamic African e-mobility players — about the opportunities they see in this nascent market, and how their solutions remain ahead of the curve.
Rwanda-based electric motorcycle startup Ampersand was launched by New Zealander Josh Whale in 2019 — though he began working on the company a few years prior. While taking a year-long sabbatical immersing himself in renewable energy and electric vehicles, Whale saw the catastrophic effects of climate change in areas like the Himalayas and Sri Lanka. The idea to develop Ampersand began brewing while he lived in Beijing prior to his sabbatical. He saw the impact of access to electric motorcycles on the income levels of commercial drivers and on the environment.
The company, which sells electric motorcycles primarily to taxi drivers, was the first of its kind in Africa. Whale had considered several emerging markets to set up Ampersand, and he identified Rwanda due to its clear policies for transport decarbonization and tax incentives. Another factor that made Rwanda conducive: high fuel costs in East Africa made green transport alternatives more attractive. Because East and West Africa already have a high concentration of people using motorcycle taxis called “boda-bodas,” It made sense for Ampersand to produce motorcycles rather than cars or other vehicles.
Ampersand solves a tangible pain point for Rwanda’s motorcycle taxi drivers: high fuel prices. Annual fuel costs run about $500 with a traditional bike, cutting a driver’s average yearly earnings to $1,595 – compared to about $2,131 with an Ampersand bike. The startup’s motorcycles cost $1,900 upfront, but drivers can finance them at $5 a day paid over 18 months.
“There’s a huge demand as these motorbikes work for 12 hours and drive on average 150 kilometers a day. The word of mouth among customers was such a huge thing,” CEO Whale shared. “We didn't even have a sign on the street, but had 1,300 drivers within a space of six weeks of operation requesting a bike.”
It currently has over 500 electric motorcycles on the road and a waitist of 5,000 Rwandan taxi drivers. Access to finance for drivers has evolved significantly over the last three years too, with fintech players like M-Kopa providing loans for these vehicles. Solar power rivals such as B-Boxx are also offering pay-as-you-ride solutions.
Manufacturing batteries locally has proven key to its early success, positioning it not only as a motorcycle manufacturer but also as an energy company. The startup’s “battery swap” stations use software that calculates a battery’s energy consumption. The driver pays for the usage costs, and they can swap the old battery with a fully charged one in the same amount of time it would take to refuel a bike that runs on petrol or diesel.
What’s ahead? Ampersand has partnered with Total Energies, which runs Africa's largest network of gas stations, to scale its battery swap operations as it expands into the Kenyan market. As a first mover in Africa’s e-mobility space, Ampersand has created 184 green jobs at its startup and 500 indirect jobs through its network of motorcycle taxi drivers. Its staff ranges from frontline assembly professionals and battery swap station attendants to electric car and software engineers.
The company also has apprenticeship and vocational training programs in the pipeline, and it often engages with academic institutions to build market responsive education for the e-mobility sector. So far, Ampersand has raised $14.9 million from investors, including a $9 million debt facility from the U.S. International Development Finance Corporation (DFC) in 2021; it’s looking to raise a Series B round in the coming months.
“We're inundated with interest and requests from all over the continent,” Whale said. “We've certainly got our hands very full, even if we were only to do East Africa, given the market potential of seeing most motorbikes going electric by 2030.”
As an electric engineer by profession, Jit Bhattacharya co-founded BasiGo in 2021 with a mission to revolutionize public transport with cost-effective alternate solutions to diesel vehicles. The California native moved to Kenya in 2017 after spending a decade in Silicon Valley in the nascent days of electric vehicle technology and batteries to assume the Chief Technology Officer (CTO) position at Fenix International – a “pay-as-you-go” solar home energy system company. The business was soon acquired, and Bhattacharya joined a venture capital firm called Factore Ventures — which was Ampersand’s initial investor.
“Ampersand deserves all the credit for being the pioneer in e-mobility in Sub-Saharan Africa and in really coming up with the first business model for how to gain traction and affordability in the mobility space,” CEO Bhattacharya said.
BasiGo identified public transport as a viable market for electric vehicles as they are high mileage vehicles. Electrifying public transport vehicles could lower overall operating costs, despite high upfront price tags. Bhattacharya said he believes East Africa has great potential to be a market leader in sustainable mobility, given the vast access to renewable energy solutions. Investors are compelled: BasiGo has raised $4.4 million overall.
BasiGo has an edge: the cost of building electric buses has fallen 50% over the last decade. Public buses are the most widely used form of transport in Kenya and are privately owned by drivers — not the government. The startup partnered with BYD Auto, China’s second largest EV maker, to help it retrofit vehicle features specifically for the East African market. Key insights included the importance of assembling the buses locally to leverage tax incentives.
When it comes to battery infrastructure, buses are easy to solve as drivers travel the same route each day and get to charge overnight at the same places. BasiGo sells 25-seater “K6” electric buses for the same upfront costs as a diesel bus — typically about $42,000 — but offers a “pay-as-you-drive” model for the battery fees ($0.17 per kilometer).
“This model covers all the battery maintenance and charging requirements and pay amounts that are based on kilometers driven. Through all of this, we're actually able to offer drivers a 5% to 15% savings, compared to diesel and maintenance on their combustion engine buses,” said Bhattacharya.
The company’s 27 workers are currently piloting the pay-as-you-drive financing model. Like many startups, access to capital does not come easily, particularly for a hardware, asset heavy business. Given the time sensitivity of climate change, Bhattacharya explained investors are increasingly open to financing hardware solutions like BasiGo. Its aspiration is to finance and assemble 1,000 electric buses in Kenya by 2025, which would represent 5% of Kenya’s current public bus market.
Ghanian serial entrepreneur George Kwadwo Appiah co-founded Solar Taxi after seeing the growing need for green transportation solutions in Ghana.
Launched in 2018, Solar Taxi locally assembles and distributes affordable electric two-wheel and four-wheel vehicles for transportation and delivery purposes. It has a broad target market, including corporate clients, who want to shift existing fleets to electric options. It has also launched a rideshare app that uses its fleet of electric vehicles and even gives drivers the option to buy the cars.
E-commerce delivery drivers on platforms such as Jumia and Bolt buy or rent Solar Taxi vehicles as electric alternatives to diesel motorcycles. Solar Taxi can also work with motorcycle drivers to swap combustion engines with electric ones.
The startup received an undisclosed amount of funding from Kenyan VC firm Persistent Capital in August, which it is using to expand beyond Ghana. It also plans to increase its 56-person workforce with the funding and find sustainable solutions to its charging infrastructure.
The idea to establish Solar Taxi came when Appiah’s startup incubator Kumasi Hive built an electric vehicle prototype to validate it in the local market.
“Our first prototype was a very simple concept that was similar to a golf cart…powered by solar panels. We were able to receive good feedback from the market through it,” shared CEO Appiah.
The Mastercard Foundation was an early investor, giving Solar Taxi $500,000 in seed capital to assemble two- and three-wheel electric motorcycles with parts imported from India and China, which it would sell via a buy-or-lease model.
For electric mobility solutions to gain more market traction, sound policies that promote local assembly and production together with tax incentives and subsidies that encourage the demand are a must. The U.S.’ recently launched federal tax credit for EVs is similar to one China unveiled in 2015, which helped the country’s EV market lead the world by sales volume. EVs present lucrative opportunities in these countries – just look at San Francisco-based charging infrastructure startup TeraWatt’s $1 billion capital raise announced last week, a year after it launched out of stealth.
African lawmakers must follow suit to encourage local production and demand. Policies must contend with structural constraints like an unstable electricity supply, while enabling greater renewable energy capacity. Led by Ampersand, BasiGo and Solar Taxi, e-mobility promises plenty of benefits for the continent, particularly the creation of thousands of green jobs. The market is teeming with opportunities for more entrants to participate and innovate.
Correction: The spelling of two companies mentioned - Factore Ventures and Fenix International - was corrected on Sept. 22, 2022 at 4 p.m. ET.