The global automotive industry has shifted significantly towards electric vehicles (EVs) in recent years. This shift is aimed at reducing carbon emissions and fighting climate change. The transition to cleaner mobility has given rise to a new sector known as E-mobility or Electromobility. According to Gartner, Electromobility refers to the use of electric powertrain technologies, in-vehicle information and communication technologies, and connected infrastructures to enable the electric propulsion of vehicles and fleets. These electric vehicles may include cars, two-wheelers, commercial vehicles, boats, and even aircraft.
Over 2.3 million electric cars were sold in the first quarter of 2023, about 25% more than in the same period last year.
Kenya, renowned for its stunning landscapes and dedication to sustainability, is actively participating in the green revolution by promoting E-Mobility. With government incentives, technological advancements, and a growing awareness of environmental issues, the use of electric vehicles in Kenya is increasing, which bodes well for a cleaner and more sustainable future.
The Current Landscape
According to a draft of Kenya’s National Climate Change Action Plan (2023-2027), the country’s population is undergoing rapid urbanisation, with about 50% of its people living in urban areas. This rapid urbanisation has resulted in an increased strain on the environment, leading to deforestation and pollution.
Reducing the release of greenhouse gases (GHGs) is a possible solution to the problem of climate change. Movement and transportation are the main contributors to the emission of polluting gases that have a detrimental effect on climate cycles in the long term. To address this issue early on, the government is already taking steps to restructure the mobility market.
While still in its early stages, Kenya’s electric mobility market is brimming with promise. The landscape has a growing number of players, with an estimated 18-20 companies presently competing for a piece of this booming sector. In the years following the pandemic, the market has witnessed significant activity, with more and more companies joining it. The government is also taking steps to promote the adoption of electric vehicles and transitioning to electric mobility, indicating a strong push towards a greener transportation sector.
Following the commitment made at COP26, Kenya has set a target to get 5 per cent of its newly registered vehicles as electric vehicles by 2025. According to the National Transport and Safety Authority, as of February 2023, 1,350 electric vehicles (EVs) were registered in Kenya. Motorcycles constituted more than half the share with 844 registrations, followed by three-wheelers at 153. Motor vehicles also had a significant share with 186 registrations, which included 5 saloons, 167 station wagons, 3 double cabins, 5 vans, 3 buses, and 3 lorries. The remaining 150 registrations were classified as “other” vehicle categories.
Kenya’s e-mobility sector has undergone a remarkable transformation in recent years, and its rapid growth can be attributed to a variety of factors, with government policy playing a pivotal role. Strategic tax and regulatory changes have positioned Kenya as a highly attractive destination for electric vehicle (EV) assembly. The concept of “Completely Knocked Down” (CKD) units is key to understanding this shift. CKD is used to describe a product that is delivered in parts and assembled at the destination by the consumer or the reseller. CKD EVs benefit from duty and VAT exemptions, translating to a cost advantage of roughly 25% compared to fully assembled imported EVs. Moreover, traditional internal combustion engine vehicles face even steeper import duties, often reaching 35%. These financial incentives have created a favorable environment for local EV assembly, supporting job development, knowledge transfer, and, ultimately, a more sustainable transportation industry in Kenya.
Investment landscape of Kenyan E-mobility
Companies such as Kiri EV, Roam Electric, Ecobodaa, BasiGo, Ampersand, eBee, and many others are creating an emerging market for electric mobility stakeholders in Kenya. These companies have attracted private and public investments, fueling the rapid development of the country’s EV ecosystem. The Kenyan e-mobility sector has undergone a remarkable transformation in the last five years. Following a period of relative dormancy in 2019 and 2020, during which e-mobility startups struggled to raise more than USD 1 M, the sector experienced a dramatic resurgence in 2021, with a total investment of USD 10 M. This surge was largely fueled by Ampersand’s USD 9 million debt financing from the U.S. International Development Finance Corp and BasiGo’s USD 1 M pre-seed round from Climate Capital and Third Derivative.
Advancements in technology and innovation and a growing public interest in sustainable transportation fostered the emergence of numerous e-mobility startups and a boom in investor interest. The upward trend continued in 2022, with the sector recording a whopping 310% increase in investment compared to 2021, reaching a total of USD 31 M. BasiGo emerged as a major player, raising USD 10.9 M across two deals. Additionally, Spironet secured a substantial USD 20 M investment, attracting key players like BII, Mobility 54, USAID, and the Africa Transformation and Industrialization Fund.
2023 solidified Kenya’s position as a frontrunner in Africa’s electric mobility revolution, with a phenomenal tripling of investment, totalling over USD 90 M across nine deals. Roam Electric, a leading Kenyan manufacturer of electric vehicles, secured a prominent position with two mega rounds totaling USD 7.5 M from At One Ventures, Factor[e] Ventures, and Ambo Ventures. Spironet, formerly known as M Auto, strengthened its position in the two-wheeler category with a USD 60 M debt round from Societe Generale. This upward trajectory highlights the growing need for sustainable transportation solutions in Kenya and the burgeoning innovation within the sector.
Although primarily based in Rwanda, Ampersand expanded its electric motorcycle battery swapping and charging station operations to Kenya in 2022, in collaboration with TotalEnergies Kenya. Founded in 2016, Ampersand boasts a remarkable track record, consistently raising funding and establishing itself as a major player in both Rwanda and Kenya, with over 1,700 electric motorcycles and 32 battery swap stations (reportedly). With a strong commitment to affordability and sustainability, Ampersand aims to serve one million vehicles daily by 2030, showcasing its unwavering dedication to advancing e-mobility in East Africa. Similarly, Spironet, an electric motorcycle and scooter company with a strong presence in Benin and Togo, expanded its products and services in Kenya in 2023.
Challenges and Opportunities
Although the future of electric vehicles in Kenya looks promising, several challenges remain. These include the high upfront cost of EVs, the limited availability of different models, and the need for a more robust charging infrastructure. Another crucial challenge is the availability of uninterrupted power for charging the EVs.
However, the challenges brought by the rise of electric vehicles in Kenya present unique opportunities for local manufacturers and startups to produce electric vehicles that are tailored to the Kenyan market. This could create jobs and drive economic growth.
According to a recent study conducted by the University of Massachusetts and the World Resource Institute, the power grid in Nairobi has been deemed capable of handling the demand for EV charging. The study found that the current power infrastructure of Nairobi is strong enough to support the switch to electricity for all two-wheeler vehicles in the city. Additionally, the power infrastructure can fully support the switch of 10% of Nairobi’s other vehicles, including private and commercial fleets, which are currently at approximately one million.
Kenya Power championed the cause of promoting E-Mobility by organizing an E-Mobility Conference last year. Following the conference, a report was released in which Kenya Power decided to support the development of the E-Mobility ecosystem. This includes identifying potential sites for charging stations and developing geo-mapping software to help users locate the nearest charging station. Additionally, they plan to phase out approximately 2,000 fossil fuel-powered vehicles from their fleet over the next 4 years. To achieve this, they will purchase new electric vehicles and motorbikes.
According to a news article published in September 2023, Spiro, a company operating in Togo, Benin, and Rwanda, is planning to introduce 3000 battery charging and swapping stations. Given the rising fuel prices, the company has emphasised that switching to electric vehicles is not only an environmental necessity but also an economic one. However, the details of the rollout plan have not yet been made clear.
Looking Ahead
Kenya is taking a significant step towards a sustainable and eco-friendly transportation sector by transitioning to electric vehicles. With the right policies, investments, and innovations, Kenya has the potential to lead the African continent in electric mobility. By embracing electric vehicles, Kenya is beginning its journey towards a greener future that promises a cleaner, healthier, and more sustainable environment.
