Electric buses as a viable means of commuting from one place to another are gradually gaining interest in Africa. As of December 2023, countries like Senegal, Rwanda, Kenya, Tanzania, and Uganda have either rolled out or are on the verge of releasing the buses on the streets.
Nigeria is also planning to roll out electric buses this year. Borno, a state in the northwest region of the country, has already deployed a few electric mini-buses on the road, and Lagos State has also made commitments to launching electric buses in 2024. But the challenges facing electric vehicle (EV) rollout in Africa’s most populous country are many. However, the Kenyan approach may offer lessons on how to develop an EV industry.
In Kenya, the electric buses market seems to have recently gained public confidence and encouraged companies championing these investments to now set their sights on other markets outside the country. Kenya has the most number of recorded electric buses on the road on the continent. The current estimate is over 250 electric buses. The government set a target of 5 percent of new vehicles to be electric by the end of 2025.
Albin Wilson, chief product and strategy officer at Roam, identified the rising global price of fuel as a major factor driving the adoption of electric vehicles in general in Kenya. There is also inflation, which is accelerating and forcing the government to weigh the price of fossil fuel-powered buses and electric buses. The Kenyan government also lowered the cost of charging, imposed an energy tax and reduced the import cost of EVs.
The Kenyan government is also encouraged that electric buses are the future of transport in the country with the investment of companies like Roam and BasiGo that are building buses with mostly locally sourced materials that are tailored to the local market and Kenyan consumers.
“Roam has been focused very hard on the end-user. What do they need? Who are they? What are their pains and how can we solve those with compelling and great products? Roam is essentially a product company. We design motorcycles and buses for specific use cases on the African continent. What we do is vertically integrate a lot of processes so that we can offer those products at the best prices. We are getting manufacturing tools made custom for the products, really driving down the price as well as addressing the end user with a lot of very compelling features,” Wilson said.
Andrew Amadi, CEO of Kenya Renewable Energy Association, told BusinessDay that behind the growth of the electric buses project is a deliberate approach by the government to open up the space for investment.
The government first laid the foundation for EVs with diversified energy production sources. Kenya’s grid has an installed electricity generation capacity of 3,321 megawatts (MW) with peak demand at 2,132MW. It has a low overnight off-peak demand of 1,100MW. The country also generates electricity using wind and geothermal power. According to Statista, geothermal and thermal energy became the main sources of Kenya’s electricity production in March 2023. The country generated 509 million and 167 million kilowatt hours (kWh) from each source that month, respectively. Wind power contributed 12 million kWh, whereas hydro accounted for 126 million kWh.
Amadi said this investment made it easy to easily deploy charging infrastructure, which ranges from 20kW to 500kW for the buses. The cost goes from 600 euros to about 10,000 euros per charging point.
“It will help generation during off-peak hours when the main sources of electricity are wind and geothermal. When the wind power dips, it causes venting of steam, which can be mitigated by charging electric vehicles at night on a lower tariff,” said Amadi.
While it is pro-electric, the Kenyan government is not funding the industry or in control of any company producing electric buses. There is an enabling policy environment, with the Kenyan President being the key champion for the transition to EVs. This is part of Kenya’s National Adaptation and Mitigation Action to reduce carbon emissions by 32 percent before 2030.
The private-led approach has enabled the industry to attract a lot of investments. The country has about four electric bus operators including BasiGo and Roam, which are at the forefront of providing the infrastructure like the locally assembled buses and charging infrastructure in the market.
In 2022, BasiGo closed two funding rounds. The first was in February when it raised a $4.3 million seed funding round to help it commercialise its business model and begin local assembly of electric buses. It followed up with $6.6 million in seed funding to begin commercial delivery of locally-manufactured electric buses and charging infrastructure. Through its Pay-as-you-Drive model, BasiGo allows owners to purchase the K6 electric bus without having to pay for the expensive battery technology. The buses are managed by private savings and credit companies that operate them and pay per use from BusiGo who also provide charging services.
Wilson of Roam told BusinessDay that it addressed the infrastructure challenge in the Kenyan market by focusing on mass transit vehicles, vehicles that are used all day and every day. The utility is much higher on buses and motorcycles, especially because they are used for cargo, taxi purposes and public transport. Roam’s focus on these categories of vehicles is due to their high return on investment, not just for the company but also for the operators. This enables the operators or end-users to start saving from the first day of using the vehicles. Roam also had an innovative approach to solving the charging infrastructure problem in the country.
“How we solved the charging infrastructure is by the motorcycles they can be charged anywhere we offer a hybrid charging model which means that you can rent a battery in one of our Roam hubs which is a location where you come with your bike and you rent a battery for a day or longer time, and you bring it back so you can get a fully charged one or you can stay at the same station and charge your battery or you can even charge at home. Charging at home enables you to charge for longer and at your convenience. Every motorcycle comes with a free portable charger. For the buses, we sell those with infrastructure implemented with them like fast chargers and slow chargers for nights and charging that we do on the routes,” Wilson said.
Roam has an ambition to stay as a leader in both Kenya and Africa by expanding into the relevant markets in the coming years.