Entrepreneurship Zone: 18 November 2022 :: Kenya: Electric motorbike and bus manufacturer bets on growing demand

Fri Nov 18 11:42:53 CAT 2022

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Entrepreneurship Zone: 18 November 2022 ::  Kenya: Electric motorbike and bus manufacturer bets on growing demand

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Roam, operating out of Kenya, manufactures fully electric motorcycles and buses for the African market. Jeanette Clark spoke to the chief product and strategy officer at the company, Albin Wilson, about market potential for the vehicles, financing models and expansion plans.

More and more, the global future of mobility appears to be electric. According to a McKinsey sturdy, major automotive markets – such as the United States, Europe and China – are expected to sell only electric vehicles by 2035. By 2050, the consulting firm says just 20% of all vehicle sales globally will be combustion engines.

One company in Kenya is preparing to tap into the growing opportunities. Roam was established in 2017 and aims to make electric mobility more accessible and affordable to users, first in Kenya and then the rest of the continent. In 2022, it launched its Roam Air motorbike for US$1,500 and introduced two electric bus models: Roam Move and Roam Rapid.

Albin Wilson, chief product and strategy officer, says Roam prioritises the development of electric vehicles that make sense for the use case in the country in which it operates. “We are different from our competitors; we don’t merely import a vehicle model and try and implement its use here.”

Motorcycle market prospects

The company expects rapid market growth, especially from its motorcycles which are predominantly used as taxis or to deliver goods. “It is such a logical vehicle for this market. It is smaller, making sure that our roads don’t get congested, and enables us to deliver to the service economy in the country,” he says. “As the market grows, it will assist in eliminating combustion engine emissions.”

Most of the components for the motorcycle are sourced from local suppliers. The design is also suitably simple so that spare parts are readily available. The bike is fitted with a dual battery system, each with a range of 90km. The batteries are easy to remove for charging using the provided portable charger, plugged into any 220V wall outlet. The charge time per battery, to 100%, is four hours.

In Kenya, the cost of charging one battery is calculated at Ksh75 ($0.62), which equates to less than one shilling per kilometre.

Roam currently has 150 motorbikes on the road and is in the process of ramping up production to another 150 every week on a single assembly line. “Our facility, however, could have a much higher capacity and we expect the units per week will increase rapidly in the next year.” Wilson has said in a previous interview that the company will most likely reach 200 units sold by the end of the year.

Roam is in discussions with a financing partner for a 14-month lease-to-own plan for its motorcycles.

Roam has piloted two electric bus models.

Bus pilot near completion

Wilson cannot yet divulge the potential assembly capacity of the bus plant as this is still in the pilot phase. The batteries are imported – along with different components required for the tailored drivetrain and chassis – and the vehicles are assembled locally. The body of the bus is also built locally using suppliers in the country.

Roam aims to secure public tenders for the public transport Roam Rapid bus, a 77-seater (90 including standing passengers) that can travel 360km on a single charge. “Public transport buses make sense for electric mobility as we can deploy the charging infrastructure on the route the bus travels. We will sell the bus and the charging stations as a package deal,” explains Wilson.

The Roam Move, a feeder bus that can travel 200km on one charge, comes in two configurations: a 51- or 41-seater. The target market for these will be cooperatives operating mini-bus taxis, called matatus.

Wilson is excited about the Kenyan Government’s commitment to support electric mobility, which includes possible incentives for electric bus manufacturing and VAT exemptions.

To further assist with the affordability of the buses, the company is introducing an ownership model where the initial investment will be equivalent to that of a diesel bus. The owner can then use operational savings from using an electric vehicle (estimated at a minimum of 60%) to pay off the remainder of the cost in less than four years.

Overcoming manufacturing challenges

Manufacturing in Kenya has its challenges, according to Wilson, but none they have not been able to address by implementing standard operating procedures with their local assembly and supplier partners. “Supply chain is the hardest part and I think it will always be, as the manufacturers in the market do not yet have that high-volume just-in-time setup you might find elsewhere in the world,” he adds.

As yet, no electric vehicle battery manufacturers operate on the continent; this remains one critical component Roam has to import. However, Wilson believes they may be able to source from the region in the future. “Localisation makes sense if you can get the quality and the price point correct, and we should soon start seeing this.”

For future expansion, the company is already looking at assembly partners in West Africa but would first like to get the model right in Kenya and then replicate it.

Roam’s electric motorbike sells for US$1,500 and is aimed at gig-economy drivers.

Howwemadeitinafrica

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