Africa's e-mobility moment⚡

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Electric vehicles (EVs) are taking over the world.

Thanks to companies like Tesla, you can charge your car instead of filling it up at a gas station.

Today, there are 40 million EVs on roads across the world.

And Africa is not about to be left behind.

But are we ready?

The Story

Last week, Spiro, an African EV company raised $50 million, making the deal public at the Africa CEO forum in Kigali, Rwanda.

This comes just months after they got $63 million to expand across Togo and Benin.

Bikes are popular on African roads, and Spiro is making them electric.

Already, local ride-hailing startups like Uganda’s SafeBoda are switching to electric bikes, creating a market for startups like Spiro.

But, Spiro is not the only EV startup catching investors' eyes.

E-mobility on the continent is buzzing with funding action.

And last quarter, mobility startups raised the most money beating traditional heavy hitters like fintech:

• Rwanda’s Ampersand raised $18.5 million in January to scale its e-bike network across Africa.

• Roam raised $24 million last month to build electric cars locally.

• While Kenyan electric bus startup, BasiGo, raised $3 million in March to assemble their buses locally.

So investors and founders are rushing in to electrify public transport in Africa.

But what do they see?

The Context

They see two things: a big problem and a big bag at the other end of it.

African countries have less than 5,000 cars per million folks.

And the rest rely on public transport - made up of buses and motorbikes.

In 2022, we had around 27 million registered bikes.

Add in buses, and the entire public transport system is a giant carbon emission machine.

But…

1. EVs can slow the burn

Africa is headed for a big climate change mess.

Worse droughts. Deadly floods — and prolonged food shortages.

Fighting climate change will cost Africa roughly $277 billion a year.

Even if African governments have that much money, they can’t do it alone.

And they need EV companies to speed up the energy shift.

Electric vehicles produce zero emissions, run on clean energy, and are one way to slow down climate change.

2. We smell dough - and it’s not from baking

When fuel prices keep rising, it’s a good bargain not to need gasoline.

For riders, this is a strong incentive to make the switch.

Riders can spend just over $6 on fuel when using a petrol bike.

But this comes down to no more than $1.42 a day when using electric bikes.

The EV industry is betting on high fuel prices to sway public transport toward electricity.

And the projections are shaping up like this:

For the investors looking in, it’s a ripe market.

Bikes are cheaper than cars or buses.

So if we had to bet on the future, startups like Spiro and Ampersand, which focus on two-wheelers, are positioned to win.

But is Africa ready to fan the fire EVs have sparked?

The Tech Safari Take

Our power grids can’t handle the spike in demand that will come with increased EV adoption.

Even now, demand outstrips supply in major economies like South Africa and Nigeria.

Nigeria has had four nationwide blackouts this year, where the power grid collapsed.

EVs will add more strain to current power systems, making electricity even less reliable.

And then there’s government regulation (of course).

While investors can pitch in with funding, the EV industry needs government help to grow.

In fact, that’s how it got here:

• Rwanda offers zero import taxes on electric vehicles and gives EV companies a tax holiday.

• South Africa is letting EV companies claim 150% in tax deductions.

• Ethiopia recently slapped a full ban on petroleum bikes, aiming to swap them out for E-bikes.

But the opposite is also possible with the wrong government moves.

Kenya’s government hiked the taxes on electric vehicles last week.

This raises the price of a 60kg lithium-ion battery by $312.

And it will shoot up the price of the average electric bike.

Policies like these can slow down a growing sector.

One way out is for EV startups to actively push for the right policies - instead of hoping the government gets things right.

Startups did this in Nigeria, and it birthed the Nigerian Startup Act.

In South Africa, the same strategy produced a White Paper for the EV industry.

Africa’s EV market holds a lot of promise but also has a lot to live up to - so it needs all the momentum it can get.

What does the future of electric vehicles in Africa look like to you?

Hit reply and let us know.

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