Ampersand Aims To Have 600,000 Electric Motorcycles Across East Africa By 2030
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Ampersand, one of the pioneers in the African electric motorcycle sector, is ramping up its operations. Ampersand was founded in 2014 in Kigali, Rwanda, and quickly started work on motorbike and battery prototypes which were put on road to get real data in the actual conditions that the motorcycles would be used by customers in the target market. Along with valuable insights, this helped validate and refine its assumptions and then iterate based on the findings. Armed with this knowledge, Ampersand launched the first phase of its commercial operations in May 2019. The company launched with 20 bikes of the improved motorcycle, Africa’s first sales of an electric taxi motorcycle.
Ampersand says all of the 20 bikes are still on the road almost 4 years since being introduced on the streets of Kigali. Ampersand then proceeded to rollout battery swap stations around Kigali. These stations support Ampersand moto-taxi drivers by providing them with an efficient and fast energy top up model with a similar user experience in terms of time spent at the station as internal combustion engine motorcycles riders in the motorcycle taxi industry are used to at petrol stations.
Ampersand then gradually increased the fleet to about 60 motorcycles on the road over the 3 years following its commercial launch. In that time, Ampersand also spent a lot of time working on a monitoring and transaction platform for its battery swapping network. This work included incorporating mobile money payments, simplifying the battery swap system, and other improvements on the backend. It also developed and refined the battery management system of its battery packs. This helped Ampersand refine its systems and processes to enable it to scale to the point where it is now doing over 60,000 battery swaps per month, serving over 3 million kilometers in the same timeframe! Ampersand would have been even further ahead at this point had it not been for the Covid-19 induced supply chain issues. Just like everybody else in the automotive sector, Ampersand is still feeling the effects of the constraints along the supply chain. This recently resulted in 100 finished Ampersand bikes sitting in their factory for over 2 months waiting for Battery Management System chips.
Ampersand’s motorcycles have been well received in the market, leading to a backlog of reservations. The waiting list currently stands at just over 7,000. One of the major reasons for the uptake was the easier operations and maintenance associated with electric vehicles. Ampersand says its heavy investment in R&D and production on the ground in Kigali has also produced a very reliable battery. In East Africa, Ampersand’s bikes are running between 10,000 and 40,000 km before any service calls, that’s about half a year’s mileage for most riders based on the general nature of the motorcycle taxi industry in that part of the world. This has been a game-changer for riders as compared to the service intervals for their old ICE motorcycles. ICE motorcycle users have to do oil changes every two weeks or less depending on mileage. Along with changing oil filters, this comes out to about $200 per year that riders have to fork out just for servicing their motorcycles. But the lion’s share of the savings comes from replacing fuel with battery swaps. Before 2022, Ampersand provided a saving of around 35%, or $500 a year. With current fuel prices, that saving has skyrocketed to nearly 50%.
Ampersand says its focus this year has been scaling from its earlier prototypes and test production runs to its first full production run of its commercial motorcycle, growing from 60 motorbikes on the road at the start of 2022 to 800 now, becoming the biggest commercial electric motorcycle fleet in East Africa several times over. Sixty of these are in Kenya and the rest are in Rwanda. Ampersand plans to have 6,500 electric motorcycles in operation by the end of next year and ramp up to between 20,000 and 30,000 in 2024. A next generation battery pack, swap system, and new motorcycle is also in the works.
But Ampersand says it is first and foremost a transport energy company, not a motorcycle company. Ampersand wants to be the long term energy service provider for the commercial electric motorcycle users, whether the motorbikes are from Ampersand or any OEM. Its system is designed to easily integrate with all the big popular ICE bike models. Ampersand retains ownership of the battery packs and provides motorcycle operators with access to its network of battery swapping stations. Ampersand now has 7 swap centers in Nairobi, Kenya, and 11 in Kigali, Rwanda. The plan is to expand operations to Tanzania, Uganda, and other markets in the near future. The model of retaining ownership of the batteries and providing energy as a service to the motorcycle riders will enable Ampersand to ensure that the batteries will always be charged under the best conditions. Its monitoring platform will also allow the company to have constant visibility on all the important parameters, enabling it to continuously assess its assets and carry out any preventive or corrective maintenance should any issues arise.
Motorcycle taxi riders are also getting more confident and less worried about range anxiety. Ampersand’s motorcycle with a mid-drive electric motor has an average range of 72 km per charge in Kigali and 80km in Nairobi. Motorcycle taxi riders in Kigali do about 160 km per day. In the early days, riders would arrive at a swap station when the battery was at 40% state of charge (SOC). They then became more confident and returned to swap centers when the SOC was about 30%. Now riders are even more confident in the range and generally swap when the SOC is 20%.
There are an estimated 125,000 ICE motorcycles in Rwanda and over 2 million in Kenya. Other estimates put the total number of ICE motorcycles in Africa at 30 million and fuel spend at over $30B per year. In many parts of Africa, motorbike taxis represent the majority of all road traffic. Ampersand’s vision is to be one of the leaders in this space and aims to have more than 600,000 electric motorbikes across East Africa by 2030. Smart partnerships and innovative asset financing models will be key to growing the sector to reach those levels. Ampersand’s approach is all about collaborating with key stakeholders across the value chain. Already it has partnerships with regional asset finance powerhouses Bboxx, Watu, and M-Kopa vehicle finance, and TotalEnergies, Africa’s largest fuel station network.
The vehicle financing sector for the motorcycle taxi industry is well developed in the region. One can even pay in weekly installments spread over 18 months to acquire a motorcycle. Virtually all motorcycle taxi drivers need such financing to buy their motorbikes. This makes the sticker price of the motorbike somewhat academic: It’s the weekly repayments and repayment period that matter most. Ampersand says it has noticed that financing companies now have more faith in electric motorcycles and see fewer defaults, to the point of some offering financing at close to 25% less than the normal interest to customers taking Ampersand’s electric motorcycles. Even with a higher sticker price than fuel motorbikes, this translates to an overall net saving of about 6% for the riders on their weekly repayments, even when Ampersand sells its motorbikes for $200 more than the petrol competitors.
It’s great to see that local firms like Ampersand are making crucial progress in the drive to electrify the motorcycle sector in East Africa. All their work is starting to pay off now. Together, Ampersand’s asset financing partners have expressed an interest in financing over 50,000 electric motorcycles for motorcycle taxi riders. This will be a game-changer.
Ampersand also sees an opportunity to offer access to new demographics of drivers joining the motorcycle taxi industry with electric vehicles. This year, Ampersand worked with partners UN Habitat, GIZ, Jali Finance, and SolutionsPlus to launch a female driver program in Kigali. The motorcycle taxi industry is the 2nd largest industry in Rwanda, but has historically been a male-dominated field. With growth projections for East Africa and the continent, this industry is only expanding. Before the program in Kigali, there were under 20 female moto-taxi drivers. This project more than doubled that number, bringing 24 more women to the industry on Ampersand bikes by providing motorcycle safety and training as well as training for other critical skills like customer service, financial literacy, and business education.
Images courtesy of Ampersand
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