• Wednesday, April 24, 2024
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Nigeria to gain from $5.07bn electric motorcycles market – Report

MAX donates low-emission motorcycles to Lagos agency

Nigeria, a country with high demand for motorcycles, locally known as ‘Okada’, which has been a means of transportation for millions of people, is expected to get involved in the $ 5.07 billion electric motorcycles market in sub-Saharan Africa, according to a recent report by the Powering Renewable Energy Opportunities (PREO) program.

PREO projected those electric motorcycles will play a significant role in the transformation of sub-Saharan Africa’s transportation system towards becoming sustainable.

The report outlined the market opportunity for e-motorcycles, predicting that it will become a driving force in the African e-mobility sector estimated to be worth about $3.65 billion in 2021. The market is projected to grow to $5.07 billion by 2027.

“Investing in e-motorcycles provides a path to more sustainable and equitable growth across African communities and addresses the urgent issue of climate change,” Jon Lane, PREO programme director, said.

Lane pointed out that two-wheelers are faster and easier to manoeuvre than four-wheeled vehicles, especially across sub-Saharan Africa, which often has poor-quality roads.

PREO said that continuous investment in start-ups that tackles barriers across the value chain will be critical to maximising the full potential.

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According to industry estimates, more than 90 percent of electric motorcycles sold in sub-Saharan Africa are imported from China and India and are not built for African conditions.

“A large percentage of electric motorcycle startups in sub-Saharan Africa rely on fully built or complete knock-down (CKD) import units that are then assembled locally. The often-rough terrain navigated by drivers across the region results in significant wear and tear on the electric motorcycle caused by unpaved roads, long journeys and intense commercial use. Since suppliers are predominantly based in India, China and Southeast Asia, electric motorcycles are not customised for the African terrain,” PREO said in the report.

It further said that the sustainable mobility change in sub-Saharan Africa is expected to be dominated by electric motorbikes, but start-ups must continue to get funding to address bottlenecks along the value chain in order to realise the full potential of the market.

With an abundant supply of raw materials in Nigeria, particularly minerals and metals, as well as its expanding economy and sizable population to build electric vehicles, insufficient local production still leaves a significant gap that is filled by imports.

“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,” Lane said.

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 engine) vehicles while also customising the product to local conditions.

“Roam has now acquired the capacity to fully design the vehicles and manufacture 35 percent of them in-house with a goal to reach 70 percent in the next three to five years,” PREO said.

The company plans to expand beyond Kenya to other African markets through strategic partnerships, raise $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.

“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,” Filip Lövström, co-founder and chief executive officer of Roam, said.

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 and operates 27 battery-swap stations for electric motorcycles, considered one of the largest networks in the region.

Mobile Power operates in Sierra Leone, Liberia, the Democratic Republic of Congo and Nigeria, and is seen tackling the scarcity of high-quality battery technologies for small-scale businesses.