
More than three-quarters of all EVs in Kenya, Uganda, and Tanzania combined are two and three-wheelers, meaning there are less than five thousand four-wheelers across the three countries.
While e-bikes, tricycles, and buses have set the pace in terms of ease of ownership, the case is different on the car front due to challenges such as financing, vehicle demand, transportation, and preference dynamics in the three countries.
According to our guest today, Tom Courtright, cars will probably be the last segment to electrify in East Africa, driven by the factors mentioned above.
Show Notes:
- The Progress Playbook: Inside East Africa’s Bold Electric Vehicle Push by Joseph Maina
- Energy for Growth Hub: Who in Africa Is Ready for EVs? by Rose Mutiso, Hamna Tariq, Daniel Johansson
- LinkedIn: Advancing Electric Vehicles (EVs) and Sustainable Mobility in East Africa by Daniel R O.
About Tom Courtright:

Tom Courtright is a transportation consultant based in Kenya who is often found in Uganda and Tanzania. He focuses on boda bodas (motorcycle-taxis) and e-mobility. He is the Research Director at the Africa E-Mobility Alliance (AfEMA) and has worked with the United Nations Environment Program, Power Africa, GIZ, the World Bank, and many others. Tom is currently doing a PhD at the University of Cape Town on boda bodas in Kampala. He also holds masters’ degrees in environment & sustainability and in urban planning and a bachelor’s degree in international relations from Knox College. Previously, Tom worked in the solar industry for Aptech Africa in Uganda and Central African Republic. He grew up in Malawi, the United States and Tanzania.
Transcript:
Njenga Hakeenah: Hello and welcome everyone to The Africa EV Show, your go-to podcast for all things electric mobility in our beautiful and glorious Africa. I am Njenga Hakeenah and in every episode, we dive deeper into the future of electric transportation, one company, one individual or country at a time.
This week, we hone in on Kenya, Uganda and Tanzania, all at a go because you know, these three countries are always competing for who is the biggest economy in this region. But we know of course that Kenya is the bigger economy in this region, East Africa. Today, we are tackling the big questions; are EVs truly affordable for us Africans?
Can they power or can our power grid handle the shift to electric mobility? What policies are shaping the industry and is local EV manufacturing the key to making e-mobility mainstream?
Joining me is Tom Courtright, an EV researcher and expert here to break down the numbers, challenges and breakthroughs shaping this industry. Tom, who grew up in Malawi, Tanzania and the United States is a research director at the Africa E-mobility Alliance, where he focuses on boda bodas, which are motorcycle, taxis and e-mobility.
He has worked in the solar industry in Uganda and the Central Africa Republic. So buckle up as we take a whirlwind trip around these three East African countries.
Hello, Tom, and welcome to the Africa EV show.
Tom Courtright: Thanks, Njenga, happy to be here.
Njenga: Good, let’s start in Uganda, the latest report by the Africa E-mobility Alliance, which is where you are at, shows that Uganda had slightly more than 3,000 EVs by the end of last year. And this is out of a total of 1.8 million registered vehicles as of August last year.
And most of these EVs are motorcycles. And so with this in mind, is the government’s plan to install 3,000 public charging stations and 10,000 fast chargers feasible? And can the grid support a charging network of this size in Uganda?
Tom: That’s a great question. So reviewing and across the region, really what we see is that around 90% of all of the electric vehicles that are being deployed on the road are motorcycles or scooters.
So these, A, the demand is not that high, right? The amount of energy that they take to travel long distances is much lower than a car and certainly much lower than a bus. So the idea here, what the Ugandan government wants to do with the charging stations is to set up like the backbone of a charging network in Uganda. So currently there’s three or four public charging stations.
Now, mind you, whenever somebody buys an electric car in Uganda or really anywhere, they’re almost always sold with a home charger that is then installed at the person’s house. So for now, there are around 60 or 80 electric cars that have been operating in Uganda for a few years and they’re just being charged at home. And it’s sufficient for now, but of course it makes it very difficult if they want to travel to another city, for example.
And so the idea here is to set up that charging network. So in terms of the demand it will take, the demand comes from the cars and the buses that are deployed to use these. The vast majority of motorcycles are not using these charging networks. They’re on battery swap stations instead. So whether or not the Ugandan grid can take this, there’s actually a study we’re undertaking right now with our partner CPCS on behalf of the World Bank and the Ministry of Energy and Mineral Development in Uganda to look at that exact question. So when we have some results out, I hope we can share some of those.
But what we all know is that for now, the electric motorcycles are using these battery swap stations, the demand is not excessive. Now, what will change is if we start bringing electric buses online onto these charging network, or if we start having significant numbers of electric cars onto the network. And what we expect is that, yes, it will take much more electricity to power these vehicles so we do need to plan for them, but there’s no need to panic yet.
Njenga: All right, that’s interesting, because when you look at the numbers and how Uganda’s government has been behaving around taxation, there was a 50% reduction, and then all of a sudden they brought it back. How is this going to affect the market for EVs, especially for potential buyers, bearing in mind that costs are inflated by this taxation? And for a country that really is planning to have such a huge network of charging stations, for two cars, sorry to say that, I mean, really, how will this affect vehicle buying for EV buyers or those potential buyers who want to buy EVs?
Tom: Yeah, that’s a good question. So to recap a little bit and go a little bit further back in time, so in 2023, the Ugandan government introduced the first tax incentives. And basically what it is is that they removed import duties, which are typically 25%. They are lower if you bring in the vehicle completely knocked down.
Now that really only applies to motorcycles. Cars are not locally assembled in Uganda, nor buses are, except for Kiira Motors, which we can talk about later. So at first they went with import duty exemptions for a year and then what happened last year is that they reintroduced full import duty and then said, instead, what we’ll do is remove VAT and you won’t have to pay VAT on these.
One of the key changes though, is that they said VAT exemptions for locally manufactured vehicles. There are no locally manufactured electric cars in Uganda. And so what that has meant is that, effectively, while there was previously an incentive for electric cars in Uganda, there’s effectively no longer. We’ve brought this up even directly and even the Minister for Science, Technology and Innovation which has really supported a lot of the policy. They’ve been very forward-thinking on this. On this particular point, they wouldn’t budge. So they told a room full of us that if you wanna sell an electric car in Uganda, you have to make it in Uganda. So it’s gonna be a few years before anybody gets that exemption. So it’s really had the biggest impact on them because, like I mentioned, the motorcycles are being locally assembled.
So theoretically, they should get access to this VAT exemption. The only issue is that the wording is a bit vague, right? Saying locally manufactured. Now the ministry has said that they would recognize all of the local assemblers as local manufacturers.
But I know that there’s still been some issues in getting that VAT exemption, even though it’s in the books and there’s support from government. So it’s a little bit of a coordination issue. But yes, the biggest hit is definitely for the electric car folks.
And I know somebody who, it takes months to get a car once you import it from overseas, once you order it. And so they put in their order maybe around March of 2024 and it showed up in July, just a couple of weeks after the new finance act had taken hold. And all of a sudden the cost was 25% higher than what they’d been planning on.
So, I mean, there weren’t that many electric cars being sold anyway, but yes, what we’re gonna see is that it’s going to further delay the rollout of electric cars specifically in Uganda.
Njenga: All right. So I don’t know if you have the numbers, but if you do, it would be great to know how many four-wheelers are EVs in Uganda, how many bikes and such like.
Tom: Yes. So I was actually just having an exchange with somebody from one of the ministries this morning about this because different ministries have different numbers. But what we know is that for electric cars, it’s somewhere between 60 and 80, right? So the figure that I’ve seen is 83, but I was also sent numbers for around 60 this morning.
That’s for electric cars. On the motorcycle front, on the road right now, on the low end, it’s about 4,400. So the sales are really ramping up, particularly from one of the companies.
And so the numbers are changing all the time. So that’s why we had lower numbers at the end of last year and already by March, we’ve got hundreds more on the road. But they could be even higher.
There could be around 5,000. And this is because of the fact that there are these electric mopeds that have been sold. You know, no big names, nothing in the news.
It’s the kind of thing you find in like the Kikuubo, you know, the downtown markets is where you find these sorts of vehicles. So that’s the range. And then for buses, there’s around 35 or so electric buses in Uganda.
Njenga: And you mentioned a bit something about local manufacturing that Ugandans would only buy, you know, cheap, affordable EVs if they were locally manufactured. And I know there is Kiira, which is doing a lot of buses or has done a number of buses. And then there is Spiro, the bike guys who control like, you know, 95% of the funding in that market.
For assemblers like, or for companies like Kira, what aspect of manufacturing do they handle? Is it just assembling? Are there aspects of, you know, manufacturing parts that are done in Uganda or just, you know, import from China or wherever and then assemble them locally?
Tom: Yeah, that’s a good question. So Kiira Motors started off as a project by students at Makareta University. This is the first African-designed and manufactured electric bus back in 2014.
So you’ll find some electric bus companies will try to stake that claim, but no, it was a group of Makareta students more than 10 years ago now. And obviously that’s a lot of work to design and manufacture a bus like that. And of course the world’s leading EV design work is all happening in China. And so in order to scale, they shifted to working with a Chinese design and they are doing sort of assembly plus, right? So this is all on a spectrum. So they have been making some local parts and are working on basically creating more local parts. For now, I believe a number of their vehicles are coming together from CKD, from Completely Knocked Down Kits.
That’s still a lot of work for a bus. There’s a lot of work that goes into that compared to like a motorcycle, for example, a lot more work. So there’s inherently just more value addition in what they’re doing.
So that’s what they’ve been up to.
Njenga: Nice. Let’s cross borders and head into Tanzania, which is a country you partially grew up in, right? And in December last year, the Tanzanian government with key stakeholders initiated discussions to formulate a national policy framework for electric vehicles to regulate the importation, registration, and usage of EVs across the country.
And so far, all the latest data, which is still coming from you guys, shows that Tanzania has about 5,000 EVs on the road. And for Tanzania’s population, 5,000 is a little bit small, a number, for the population that is bigger than Kenya’s. But what do you think limits the Tanzanians from EV ownership? And are there spectacular differences between Tanzanian EV buyers and Kenyan or Ugandan buyers, for instance?
Tom: So it’s funny because on the front of it, you could point to the fact that Uganda, Kenya, and Tanzania all have around 5,000 EVs, right? They’re all around 5,000 EVs. Uganda’s population is even smaller. So Uganda’s doing even better than Kenya in a per capita.
But it’s not a competition as much as we would all like to beat Kenya. In Tanzania, I think that the big difference really is that it’s actually a very different market from either Uganda or Kenya. And the reason is that there’s not as many local startups, right? Kenya, obviously very strong startup scene.
Uganda has had a few as well. In Tanzania, instead, the vast majority of those electric vehicles are lead-acid mopeds. So they’re small mopeds using lead-acid batteries.
And they actually started back in like 2018. They started deploying them. And now, I mean, the last time I was on a bus from Dar to Morogoro, and there’s music videos where guys are driving these lead-acid scooters, right? So they’re very prevalent.
But the big difference is that that is not an appropriate vehicle for a boda boda. And they’re not being used by boda boda. So they’re being used by people who are thinking about trying to save money on their daily commute, which works perfectly because they’re being sold at around $1,000 or just under, right? So anywhere from like the cheapest is like 1.5 million Tanzanian shillings.
So you have like 700 or something up to about $1,000. So it’s a very different scene. What you do have in Tanzania is you have some, you know, pretty good electric three wheelers from a company called Tri or Tri that are operating there for the last three, four years now.
And you have a couple of local startups that have been, you know, testing out different products and business models. So it’s a very different scene overall. But the main issue really is just supply of, you know, high-quality electric vehicles, meaning lithium-ion batteries, right? Lead-acid batteries have short lifespans. They’re not capable usually of providing as much power. So what they need is to have somebody provide, you know, quality lithium-ion motorcycles because the Boto sector is the fastest-growing sector in all these places. And it’s gonna be the low hanging fruit and it’s gonna be the place that most growth will happen in the next five years by far.
But there’s just been very little of that in Tanzania. But I think that they will get ahead on the three-wheeler segment. But there are people now who are taking more interest.
So there’s also an opportunity there with the BRT, right? Tanzania has had a functioning BRT for seven, eight years now and there’s an opportunity to electrify that. Then I know that they’re looking into expanding BRT. So yeah, it’s a very different market overall from either, from any of its neighbors, really.
Njenga: I like the aspect of Tanzania being very coastal, even in the interior of it is very relaxed. There is no rush. And so probably that is why they are different from the rest of us.
But when you look at the batteries that you’ve mentioned that are lead-acid batteries and their short lifespans, there’s always been an issue of e-waste, you know, recycling management, dealing with it, handling it, whatever. Whichever term you want to use upcycling, recycling. And we have seen that for batteries like LFPs, those ones can be upcycled, recycled, downcycled and repurposed for different use.
But when it comes to the lead acid batteries, I am not sure. I am not a technician. I don’t know if, are they recyclable?
Tom: Yeah, that’s a good question.
I just really want to quickly point out that in regards to Tanzania being coastal in the interior, that also means it has very good weather and that the food is excellent. But that’s the last thing I’ll say on that. In terms of batteries, lead-acid batteries are actually recyclable and actually there’s been lead-acid battery recycling in East Africa for decades now. So it’s very, very well established. Much easier to establish at much lower cost than lithium-ion batteries.
That’s not to say that environmentally it’s much better because A, because they have so much less capacity and don’t last as long, it means that you need a lot more of them to do the same job. Another one is that there can be spillages from factories that are doing lead acid recycling and there can be issues around exposure, right? So Bangladesh and India both actually have really big artisanal lead acid recycling. So this means like informal lead acid battery recycling.
And it’s been linked to a lot of lead poisoning and things like this. So even though it exists and it’s easier to do, it has a lot of environmental repercussions I wouldn’t fully recommend. On the lithium-ion side of things, there’s multiple things that we need to do.
And I think that we should start planning for this now. One of them is to create a local market for used EV batteries. Not to use on electric vehicles again because you need a pretty high quality battery for an electric vehicle, but instead to use them for home backup systems, for solar installations, even grid scale solar PV installation.
If you have enough battery, it’s great. And so that would be fantastic. You can take the cells out, test them, repackage them and put them there.
And it’d be much cheaper and provide a really important service to the grid, right? Balance out imbalanced grids. And then the more advanced stuff around actually taking the cell apart, there’s an opportunity to do some, what’s called a black mass recycling where you melt it down here. That can be done for around $5 million or something you can set up a factory to do that.
The stage after that, where you actually extract then all of the materials from it for reuse, that’s much more advanced. It could be done, but for that to be done, it should be at like EAC level. Like one country, you shouldn’t do that alone because it’s costly and you need a big market and you need a lot of demand.
So that’s the general landscape, but there’s a lot of opportunities for the use of these batteries after their first life on electric vehicles.
Njenga: And because you have somewhat a bird’s eye view of the three countries, Kenya, Uganda, and Tanzania, are there distinct characteristics that would make EVs more popular in one country and not the other? Or are they on uniform? But we have heard from Tanzania side and Uganda’s that they are not.
Tom: Absolutely. So how the market has developed is interesting. I think the key thing really is around the personal use because that’s why they took off in Tanzania, which is that, again, coastal culture, are they’re more used to driving personal two wheelers, scooters, those have been in Zanzibar for decades.
They’ve slowly been spreading to the mainland. And so having that culture makes that kind of personal use electric motorcycle much more attractive. Personal use motorcycles don’t really exist in Kenya and Tanzania. There’s a handful of sports motorcycle folks, but it’s not a broad-based general public thing at all. People want cars. Unfortunately, in my view, people just wanna go straight to cars, spend a lot of money on cars when you could spend a lot less driving a motorcycle.
If you look at Southeast Asia, that’s how it’s developed, right? I think the other sort of differences are that, A, in Kenya, in terms of the matatus, the informal buses in the cities, you have larger buses operating. In Tanzania, actually you have in Dar es Salaam, you do have medium to large size buses operating. In Kampala, you don’t, you really just have mini buses.
And Kampala is motorcycle city. It’s the capital of motorcycles in East Africa, truly. I’ve been doing my PhD data collection there a couple of months ago, and 40% of all trips in Kampala are by boda boda or by boat. 40% and mini buses, maybe 25%, right? It’s definitely maybe, I don’t know, 10 to 20% boda boda trips here in Nairobi or even less. Minibuses are much bigger and obviously Uber is very big here in Nairobi. So that’s another difference is that Nairobi, Kenya generally has a much bigger Uber car market than either of the neighbors.
So those are the main things that I would think about. All three of them, okay, Kenya and Uganda have very clean grids. Tanzania’s grid is not as clean. So there’s something to think about. It’s maybe only 40% hydro or something in that range, right? Uganda’s grid is 95, 98% clean. Kenya’s is 85, 90% clean. So that is another difference for those who are thinking about what is gonna be the greenhouse gas impacts of this introduction of electric vehicles.
Njenga: And now we come to Kenya where we are regarded as the economic giant of this region, East Africa. But EV numbers are not much higher than Tanzania’s.
We have discussed that. However, the approach by companies enabling people to buy now and pay later for these EVs is leading to increased number of EVs on the roads, especially two-wheelers. And I have seen taxi drivers also getting into this and being able to get vehicles that they use.
And then the money that probably they were using to refuel or fuel their vehicles, they are putting that into repaying the loans. Since cost is a big issue, including myself, because getting an EV is not a decision that you make tonight and tomorrow morning you have gone to pick a car, how can this approach increase EV adoption across Kenya? And can it be replicated in Uganda and Tanzania, or probably across Africa?
Tom: So in terms of how to make these vehicles financially competitive and to spread them that way, what you’re saying, I think, is a very, very important point, which is that adoption of electric vehicles in most of Africa is driven by gains in what is called the total cost of ownership. So that’s the combination of the cost of the vehicle, the cost of the energy, and the cost of maintenance, and any other costs. It’s not about, for very few people, is it about I want to save the environment.
Because obviously, let’s remember, Africa is not responsible for climate change. It’s the US, Europe, now China, soon India. But Africa has contributed almost nothing, especially East Africa has contributed almost nothing.
So really, it’s about those other savings. Now obviously, there’s additional macroeconomic benefits here that we can talk about in a minute. But I think the key thing is that A, the financiers, the buy now pay later motorcycle financiers that go by many names, they’ve been existing for a few years.
It started in Uganda with Tugende in 2012. And now we have others like Watu and Mogo and so on. Definitely, this helps bring them into cost parity to be competitive with the local ICE motorcycles. There are already middle-class people who would buy and rent out motorcycles before any of these folks showed up. I mean, people have been doing that for almost a century. Either renting them or giving them on like a lease to somebody, so that’s always existed.
I would actually point to the case of Brazil. I know it’s quite different, but I think that there’s something to learn there, which is that in Brazil, the government actually directed two of the main state-owned banks to provide affordable loans for motorcycles. And when I say affordable loans, I’m talking about 5%, 5% interest rates.
If you buy a motorcycle, be it fuel or electric in East Africa, your loan interest rate is gonna be between 30 to 60%. It’s huge, huge difference. So while it has brought it into, it’s made it accessible for people because you only have to pay a down payment and then you can pay weekly.
It’s not the only solution and we shouldn’t think it is the only solution. I would also say that the other really key innovation to making these motorcycles affordable is it’s actually not bad. It’s actually more so the fact the battery swap system.
So how that works is that you separate the costs of the battery, which is the most expensive part, right? It can be around 40% of the cost of the vehicle and the cost of the chassis, the rest of the motorcycle. And you only buy the motorcycle and the motorcycle, the electric motorcycle without the battery can be on par, the same cost as a Bajaj motorcycle, right? The most common model around here. That’s the big thing that’s made the difference.
And then the battery gets owned by the company, the battery swap company, and they make their money back on the swaps. So I would say that’s actually had a bigger role to play in terms of making it financially affordable. On the buses, there’s a somewhat similar approach, bit different, but somewhat similar where you say, we need to make the upfront cost the same as the cost of a petrol matatu.
And then we’ll recoup the rest of our costs through charging you for the distance that you drive. And also continue to provide services around maintenance and charging and so on. So that’s an interesting model. It was first done by Proterra in the US and now BasiGo does it. On the car front, there isn’t anything comparable. And that’s one of the reasons why, as things currently stand, cars will probably be the last segment to electrify in East Africa, unfortunately.
But that’s how it is. But that’s how electric motorcycles have become so affordable and have grown at the pace that they have. All right, and now, because you mentioned buses, the guys are still banging.
Njenga: But we are seeing reports and numbers that EVs are becoming more common in Kenya. Especially in public transport, where bus companies are acquiring them in their numbers. However, the assemblers cannot produce them fast enough to keep up with the demand. I know you know about BasiGo, you know about Roam. What do you think can be done to ensure that anyone who wants an e-bus can get one and not to have to wait an eternity for this bus to be delivered? You can consider in your response, you know loans, the friendly loans, you can consider local assembly or importing without the taxes and things like that.
Tom: So this comes back to the same biggest fundamental problem that’s in all three of these markets, which is supply, right? It’s supply. It’s just getting enough electric buses. So one solution is you could start your own electric bus company.
We need more of them. I think the other really important thing here is basically that folks are trying to raise money. I mean, listen, electric vehicle startups, like having a vehicle startup is actually a very, very difficult thing because it’s hugely costly, right? It’s hugely costly.
And a lot of the folks operating in this space now in East Africa, you know, first they get a little bit of grant money and then they quickly move to getting venture capital money and eventually, you know, need to move to either quite much larger ticket sizes, you know, five, 10, 20, 50 million dollars. And then also start mixing that in with debt. The problem is that the venture capital operators in this region, they’re not really used to hardware.
They’re used to investing in like a tech company, like a FinTech company where it’s just like five guys and MacBooks. This is a very different business. So the venture capital isn’t quite the right fit for it, especially the venture capital that has focused here so far. I mean, they’re, you know, certainly trying to adjust and some of them do better and have picked up, you know, what’s going on, but also just the ticket sizes. So there’s just not enough funding going into the sector.
So there’s a couple of different solutions for that.
Something that I’m a really strong advocate though, is that, you know, if you look at where the venture capital funding is coming from, most of it’s coming from Europe or America. These, you know, why is that? You know, I honestly think we should question that more. It’s not gonna win me many friends in this sector, but I think we should question that more.
And I think that we actually need to do more to look at the pension funds that exist in East Africa, some of which have been, you know, quite well managed and basically find out, okay, how do we get them to start participating in this? Because A, they have significant sums, they have quite a bit of money and B, you know, if they’re profiting from this, fantastic. That’s the point, right? Like we want to have local economic growth. So I would say, you know, we need to look more at that.
The banks in the area, I would love for them to invest more in this too. The problem is a lot of the banks, frankly, are used to their customers being high net worth individuals or large corporations. They’re not really all that accustomed to dealing with, you know, the wanainchi.
They’re not accustomed to dealing with like the average person in the region. It’s not who they focus on and they don’t understand that kind of risk and these sorts of things. But, you know, there’s a space and I think they could benefit hugely. So that’s what I would love to see is more pension funds, more local banks and other, you know, innovative funding sources. I’m not a financier, but that’s where I see there being potential and also more long-term sustainable potential. I mean, one of the things we see right now, right? Is like USAID just disappeared overnight, you know? The Development Finance Corporation, which has provided money to several electric mobility startups, right? Three of the biggest have all taken money from DFC.
They’re all dealing with different kinds of limbo as a result of half of the workforce of DFC disappearing. We shouldn’t be dependent on that, you know? So I think more needs to be done to understand like what kind of local, what kind of local funding sources there are, you know, and keep the money in the local fund. Keep the money in the local ecosystem a bit more.
Njenga: Definitely, and I think when you talk about the funding and the sources, it’s a big, big, you know, gray area or a dark hole that people don’t want to get into. Because of course, you know, it’s coming from the US, it’s coming from Europe, it’s coming from, you know, wherever else apart from Africa. Yet there are organizations, there are banks in Kenya, in Uganda, in Tanzania, everywhere across the continent who can be able to do something, provide some funding and get these things going.
But across these three countries, where do you see the adoption of EVs being very popular? Which sectors and which type of EVs?
Tom: Yeah, so, you know, with the context, of course, that I do think supply is the biggest issue, generally, and going along with what we were saying earlier about, you know, saving money, right? About saving money on the total cost of ownership. What we see so far is that it’s folks who are very sensitive to fuel prices.
And first, everybody is, but people who are most sensitive is definitely people who are doing commercial transport work. So that means first and foremost, Boto-Botos, it means tuk-tuks, it means matatus, right? Like that’s why Bosico has a wait list of like over 500, because every time somebody pulls up, you know, at a Rubis, they’re just, you know, immediately feel that pain in their chest. They’re driving all day long, sometimes old, less efficient vehicles. So that is where there’s sort of the most demand for now. The, you know, personal car market, it’s smaller, you know, there’s definitely people who want it. And they might, some of them, some of them would be willing to pay a little bit of a premium, where you might not find that as much with the bodas or the matatus, they wouldn’t tolerate too much of a premium in price.
But still, the local offerings compared to the used car imports that are on hand, they’re still not aligned, right? They’re not aligned. And that’s the other reason the car market will take a much longer time. So yeah, so that’s where we see a lot of the demand.
I mean, I think here in Kenya, there’s a lot of unmet demand for the tuk-tuks in particular on the coast. So there’s been a couple of models introduced, but frankly, they’ve all been quite non-competitive price-wise, you know, good vehicles, but just significantly costlier than a TVS King, a very common tuk-tuk model. So there’s definitely a lot more space for growth there.
But for now, again, it’s with the commercial transport operators.
Njenga: Mass transportation of people and goods is seemingly kind of a first adopter of EV tech. And I know we have mentioned about energy or electricity, which remains a challenge to access and afford, even though it is still much cheaper charging an EV in comparison to fueling an ICE vehicle.
And because this problem cuts across the three countries, what role do you think off-grid renewable energy sources play? This includes solar and others, maybe wind, bearing in mind again that Tanzania is a bit different in terms of its energy generation, and then Kenya and Uganda are closer to 100% clean. Yeah, so what do you think is the role of off-grid renewable sources? Yeah, it’s a good question. So I would actually split that down into two things, which is off-grid and renewable.
The reason is that, you know, in my role at Energy for Impact, we run the Power Renewable Energy Opportunities Program. We see a lot of interesting opportunities there, and we support startups there. We see a lot of folks who are interested in saying, okay, you know, a lot of the EVs have been in cities, like let’s get them out to rural areas.
Rural areas don’t have great electricity access in many cases. So, you know, let’s do it with off-grid solar. And from the other side of things, I’ve seen interest in e-mobility coming from companies that have solar mini-grids.
It doesn’t work. I’m sorry, it doesn’t work. So the mini-grid operators, and again, you know, like you mentioned, I worked in solar before and I didn’t work for one of these well-funded Silicon Valley startups.
I worked for a fairly scrappy Eritrean startup. And, you know, no outside funding, $5,000 from the cousins in Canada kind of situation. And, you know, we saw immediately that like this was, that mini-grids were never going to be profitable.
I mean, the cost of electricity on the mini-grid is super high, right? You’re talking like 50 cents per kilowatt hour compared to what you get on the grid, which is, you know, at worst 20 cents per kilowatt hour. The cost of the batteries on that is a lot on that mini-grid. And then the fundamental thing is just that the mini-grids, their local demand is like light bulbs, it’s phone charging, maybe a TV, but it’s just nowhere near enough to justify setting up a mini-grid to justify that infrastructure.
And so really mini-grids have not ever been profitable and it’s never really made sense. And so I think they definitely see e-mobility as something that can save them because e-mobility is significant, more power demand, right? We’re looking at like four or five kilowatt hours per motorcycle or something, you know, assuming it’s a motorcycle taxi and that would really like save them. But the problem is apart from the fact that the electricity is expensive, the other reason that kind of, you know, off-grid or mini-grid solar isn’t gonna work is the fact that, you know, it produces solar during the day.
And so if you want to have nighttime power, that’s almost gonna double the cost of your setup because you have to have batteries and you also have to have like twice as big solar installation in order to make sure you have enough power to last you through the night. But, you know, a boda guy needs to swap when he needs to swap because he has a passenger right then. You can’t tell him come back in three hours when the sun is up, you know, like that’s not gonna work.
And what we’ve seen in places where it’s been tried is that it’s some combination of like the timing being bad, the electricity cost being high. And then the other one too is rainy season. So it works great during, you know, hot season, but, you know, rainy season or cloudy periods, all of a sudden you have half as much solar or less.
So it’s just not the way to go. But that being said, solar does still have a key role to play, which is that by putting it on a swapping station that’s connected to the grid, you can reduce the cost of your electricity. And that’s great, you know? Also, you know, when we talked earlier about, oh, what’s gonna be the impact on the electricity grid from putting up all these charging stations and the electric vehicles that will demand power from them, this will also mean less strain on the grid, right? If you have solar on the station, that means during the day you can reduce your energy costs by like 40%, 50% and, you know, provide more power.
And in case of Tanzania in particular, more clean power. So there’s definitely a role to play. There’s definitely a role to play, but it’s definitely best in concert with the grid, not without the grid.
And I would also point for the few, you know, major off-grid advocates out there. Yes, you know, obviously a small system is great, but when you think about a mini grid, I mean, did China or Europe develop a great infrastructure, electricity infrastructure by setting up mini grids? No, nobody did that. It’s way more cost-effective and just makes a lot more sense to have a national grid, right? It’s gonna be way more efficient use of your resources and you’ll be able to provide more people with power at much better, much lower cost.
Njenga: I like that, you know, China, Europe, they didn’t have mini-grids, but here we are pushing this. However, we have looked at all these challenges and they cut across not only the East African countries that we are discussing, but across Africa. Do you think that we are ready for an EV shift or do you think we need more time to get our act together?
Tom: EV shift now? Yes, no, that would be my platform. Yeah, no, no, I think we are, but I think we should be planning for it, right? So A, and some of this work is being done now. It just needs to then be implemented, but, you know, first model, okay, what is gonna be the demand over the next, not just two, three years, but next 20 years and how much more generation are we gonna need? And we need to start planning for it now because putting new generation online takes years. So we should start planning for that new generation now.
And again, that’s one of the other great benefits of this, right, is like currently East African countries are dependent on imported petrol and have to spend something like a quarter of their foreign exchange earnings just on importing petrol, which is such a waste when that could be instead spent on locally generated electricity, right? Like it’s obviously better, everybody wants that. So we need to plan for it now. We also need to look at where it’s, you know, already starting to move faster, right? Particularly the two-wheeler and the three-wheeler segment, the motorcycles and the tuk-tuks and make sure that that’s on a path to continue growing.
We need to look at where it’s not. So the cars in particular, and we need to come up with some policies to help them. And we need to have clearer automotive policies, right? So basically understand how can we, you know, currently, for example, you get more tax exemptions if you bring in a vehicle that has been disassembled because then there’s local assembly.
But a key part of that also is that there’s certain parts, especially in Kenya, Kenya does a good job of this. There’s certain parts you’re not supposed to bring in with that vehicle in order to get that exemption because you’re supposed to source those parts locally. That’s great, that’s what we need more of, right? And we need to have clear like five, 10, 15 year plans for, okay, today, these parts we expect you to source locally.
10 years from now, we’re gonna add all these other parts that you should be sourcing locally. And that way too, it’s a clear signal to industry, hey, listen, five years from now, 10 years from now, there’s gonna be demand for all of these parts. So you should start making them and figuring out how you’re gonna make them.
So we’re ready for this shift or as ready as folks will be. And we just need to kind of keep preparing, right? Keep preparing and keep figuring out how do we make sure as much of the benefits as possible stay in the region.
Njenga: And that’s a wrap on this episode of the Africa EV Show.
We’ve unpacked the realities of EV affordability, electric access or electricity access, government policies and the rise of local EV assembly and manufacturing and the road to an electric future in Kenya, Uganda and Tanzania is full of challenges but also offers incredible opportunities.
Thank you, Tom, for sharing such valuable insights. Thank you so much, Njenga.
Outro: Now the EV shift in Africa is just getting started and we’ll be here to cover every twist and turn to ensure that you remain informed on what’s happening in this space. If you’ve got any thoughts, questions or ideas, let’s keep the conversation going. Connect with us, the China Global South Project on social media platforms you’re on and also on our website, www.chinaglobalsouth.com. If you enjoyed this episode, don’t forget to subscribe leave a review and share it with your fellow e-mobility enthusiasts.
Until next time, stay charged, stay curious and keep driving the future for you, Tom, especially.