The electric 2-wheeler market in Kenya has been getting a lot of attention. There are over 15 startups in the sector that are at different stages in their development. After several years of pilot programs, a lot of them are now ramping up their operations. 285,203 ICE motorcycles were registered in Kenya in 2021, so you can understand the focus on this segment given the large addressable market for electrification.
Another key area in Kenya’s transport sector for the movement of people and goods is the 3-wheeler market. Tuk-tuks are a key segment, especially in the coastal region of Kenya in places such as Diani, Mombasa, Kilifi, Watamu, and Malindi. One can’t miss the noise from the thousands of tuk-tuks driving around these places.
Mombasa-based Solutions Africa is working to catalyze the transition of the tuk-tuk market in Kenya to electric. Launched in December 2021, Solutions Africa LTD plans to fill the gap in the market and introduce electric 3-wheelers in the region. Solutions Africa imports completely knocked-down kits and then works with Associated Vehicle Assemblers (AVA) to assemble the vehicles in Mombasa. Kenya incentivizes the local assembly of vehicles imported as fully knocked-down kits by exempting them from import duties and taxes. Only VAT is applicable. Solutions Africa has taken advantage of this to ensure that its electric tuk-tuks will be competitive with the traditional ICE tuk-tuks in terms of up-front purchase price.
Fully built imports would cost a lot more on the market and would not be as competitive with their ICE equivalents. To further ensure that its electric tuk-tuks are competitive price-wise, the first generation comes with lead acid batteries. This was a strategic move to enter the market at close to parity with ICE equivalents, as lithium-ion versions would cost close to $2,000 to $3,000 dollars more. And in an industry with tight margins, operators would not be too keen to pay $2,000 more upfront. As the price of lithium-ion batteries improves, Solutions Africa is working to introduce versions with lithium-ion batteries. For now, the company assures customers that its lead acid batteries will last at least 3 years and it is also working with partners to have a battery upgrade program to lithium-ion once the current lead acid versions reach their end of life.
Currently, Solutions Africa owns, operates, and manages the fleet of electric tuk-tuks that it has introduced in Mombasa. Due to the weight and bulkiness of the lead acid batteries, Solutions Africa currently charges the tuk-tuks directly, but is working on a battery swap model as well for when they introduce the lighter and easier to swap lithium-ion options. It takes between 6 to 8 hours to fully charge the lead acid batteries in the tuk-tuks.
Solutions Africa is also working with the key players in Kenya’s 2- and 3-wheeler financing sector to allow operators in the sector to get flexible payment terms and lower the barriers to adoption. I am looking forward to seeing these electric tuk-tuks in action soon.
Images courtesy of Solutions Africa
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