Entrepreneurship Zone: 15 May 2024 :: Rwanda’s shift to electric motorcycles brings more than just climate benefits

Wed May 15 10:29:05 CAT 2024

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Entrepreneurship Zone: 15 May 2024 :: Rwanda’s shift to electric motorcycles brings more than just climate benefits

An Ampersand swap technician slides a fully charged battery back into place. According to the company, each battery can deliver around 350,000 km of range over its lifetime, with up to 110 km per swap depending on the type of usage, the roads travelled, and weight carried.

By Caitríona Palmer

A slightly longer version of this article was first published by the International Finance Corporation.

In Rwanda, more than half the vehicles on roads are ‘moto-taxis’. They are the backbone of the country’s transport system. Ampersand, a fast-growing electric motorbike company in Kigali, is allowing motorbike taxi drivers to save money and cut emissions.

It is mid-afternoon in Kigali, and on a busy commercial street lined with flatbed trucks carrying shipping containers, motorcycle rider Numukobwa Dative pulls over to the curbside to pick up a passenger. The young man is looking for a ride to the city centre and, after a brief haggle over price, Dative hits the throttle and they merge effortlessly into a sea of rush hour traffic.

Dative is the owner of a ‘moto’, one of the ubiquitous motorcycle taxis that form the backbone of commercial life in Rwanda’s capital, ferrying people to and from work, making food deliveries, and running errands.

But what sets Dative’s motorcycle apart from the more than 75,000 others on the rolling green hills of this vibrant city is a distinctive yellow box that sits at the base of her motorcycle. It’s a lithium-iron-phosphate battery manufactured by Kigali-based Amrpersand, an eight-year-old startup and one of Africa’s first electric vehicle and EV energy companies. The battery provides electric power, giving Dative a smooth, silent ride of up to 100 km per charge.

In Kigali and elsewhere across East Africa, battery-powered motorcycles are slowly replacing their noxious, oil-guzzling predecessors, making a quiet energy transition that is inspiring a startup revolution eager to capitalise on the billion-dollar market for electric two- and three-wheel vehicles and the energy that powers them.

With 30 million commercial motorcycles in Africa alone, electric motorcycles bring more benefits than just a reduction in greenhouse gas emissions and air pollution. Costing less to acquire, finance, and maintain than an oil-powered vehicle, they are also putting back life-changing money in the pockets of their drivers and their families.

“For a motorcycle driver with a petrol bike, the energy costs are around $2,000 a year. With us, that cost is reduced by about a third,” says Josh Whale, CEO of Ampersand. “So, every year, our drivers are saving about $700.”

In a country where the average monthly wage equals $188, that adds up to significant savings. With each moto-taxi trip costing, on average, $1.50, Dative can earn up to $23 a day. That translates to a 35% increase in income per week as opposed to a petrol motorcycle.

Whale, who founded Ampersand in 2016, headquartered his e-motorcycle business in Kigali to take advantage of the country’s ambitious green policies, generous tax incentives, and abundant, affordable, and reliable electricity. Since then, Ampersand has grown its fleet in Rwanda to more than 2,200 e-motorcycles, over 300 employees, and 26 charging stations. In Rwanda and Kenya combined, Ampersand powers over 1.2 million km per week and provides 120,000 battery swaps every month.

“It was the lowest of the low-hanging fruit,” says Whale. He points out that Rwanda’s e-mobility incentives, particularly an electricity tariff and VAT exemption that lowers the cost of battery leasing for drivers, is inspiring other African countries to follow suit.

Growing as a company and as individuals

At first glance, Ampersand’s Kigali operation, located near the heart of the city centre, looks deceptively small. A glass shopfront displays a shiny red Ampersand Gen3 e-motorcycle, behind which a reception desk welcomes visitors.

But walk through a small warren of offices and suddenly a vast production facility opens up, arranged around a large courtyard ringed by eight warehouses where dozens of Ampersand staff assemble batteries, build motorcycles, test software, and perfect research. In one warehouse, neat rows of e-motorcycles, wrapped in plastic and placed in crates, await shipment to Kenya, where Ampersand expanded in 2022. Current assembly totals 100 e-motorcycles and 140 batteries each week.

In the battery assembly warehouse, beneath banners containing inspirational quotes by Aristotle and Andrew Carnegie, Lydia Micomyoza, a 26-year-old lead technician from Kigali, tests rows of newly assembled batteries with a laptop in hand. Nearby, two colleagues affix QR codes – essential for Ampersand’s unique driver software – to the top of each yellow box.

According to Micomyoza, each battery can deliver up to 350,000 km of range over its lifetime, with up to 110 km per swap depending on the type of usage, the roads travelled, and weight carried. This means that drivers like Numukobwa Dative need to swap out less frequently than drivers who refuel with petrol.

The batteries also help solve the immediate problems of air and noise pollution, explains Alice Rwema, Ampersand’s general counsel, who says that each e-motorcycle reduces approximately two tonnes of CO2 per year. “Our motorbikes are quiet, which reduces significant noise on the street,” Rwema says. “In addition, our drivers get to breathe cleaner air. That’s very important to us.”

Transforming African transportation

Numukobwa Dative works as an e-moto taxi rider in Kigali, the capital of Rwanda.

Clad in a black leather jacket, jeans, and white sneakers, with a siren red helmet, 22-year-old Numukobwa Dative is the epitome of motorcycle chic. But she’s also a savvy businesswoman who understands the economic benefits of riding an e-moto taxi, and the life-changing benefits it can bring.

“I chose Ampersand because they offer moto-taxis that are cheap to use and good for the environment,” says Dative. “The bike is easy to handle and not complicated to ride.”

Dative, who began driving a year and a half ago, purchased her e-motorcycle for $2,100, including interest, through an 18-month credit financing program coordinated by Ampersand and The Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) and funded by UN-Habitat via SOLUTIONSplus. She and a group of 32 other women received free driving instruction and Dative has also completed a short mechanics course. Since then, Dative and these female riders have formed a cooperative to support each other.

Dative’s e-motorcycle debt is now fully paid thanks to a steady stream of daily customers who hire her to take them to school, work, bus stations, and home again. In between she runs errands and handles food deliveries.

“What makes me happy is when I am transporting clients and they appreciate and encourage my work,” Dative says. “They say, ‘Keep it up!’ and that all women should be daring enough to come on the road.”

On a typical day, especially if there is no rain, Dative will recharge her battery twice, giving her an approximate range, depending on her load, of 150 km. She charges at one of Ampersand’s multiple swap stations, dotted at advantageous points around Kigali.

At an Ampersand swap station, distinguishable by the company’s trademark yellow branding, Dative opens an app on her phone that tells her how much battery life is left. Using a swap trolley made locally at the company’s factory, a technician unhooks the battery from the base of her motorcycle, wheels it to a charging station, unplugs a fresh battery and slides it back into place into Dative’s e-moto. The process takes less than five minutes and costs Dative 2,100 Rwandan francs or $1.60, minus credit for any unused power. She is now good to go for the rest of the day.

Critical to Ampersand’s popularity among moto drivers in Kigali is the easy-to-use software that tells riders how much charge is left in their battery and provides tips on utilising power based on their riding habits. The smart maintenance system also enables Ampersand to efficiently manage and improve its battery fleet, as well as alerting the team to potential battery or vehicle repairs before they happen.

“It’s really important for drivers who are switching over from fossil fuel, which is obviously widely available, to be able to go into a station and get a battery that is fully charged and reliable,” says Whale. “The software plays a really critical part.”

Whale was inspired to pursue clean energy projects after he watched the 2006 documentary ‘An Inconvenient Truth’ as a university student in his native New Zealand. However, it wasn’t until he moved to China in 2009 and witnessed the proliferation of low-cost and easy-to-operate electric motorcycles and scooters that the seed for Ampersand was sown.

“It got me thinking that there could be cases where you could deliver an electric vehicle with current unit economics, current production costs and current lithium battery costs that was actually more economical than a than a petrol motorcycle,” he says.

Fueling a greener future

Making the switch to electric mobility around the world has already reduced global oil demand by 1.8 million barrels a day, according to new research from Bloomberg. Two and three-wheel e-vehicles, the data says, account for more than half of that reduction. In East Africa, where 100 million people a day use motorbike taxis, the switch to electric could be transformative.

Investors are taking note. In late 2023, the Africa Go Green Fund (AGG), designed to support activities that mitigate greenhouse gas emissions in Africa, provided $7.5 million in debt financing to Ampersand to expand battery production and research and development.

“We believe that e-mobility has the potential to transform African transportation,” said Laurène Aigrain, a managing director with Cygnum Capital, which manages the AGG Fund. “This facility will help make e-mobility more accessible and affordable for people across the African continent, while also supporting the development of a green economy.”

For Whale, the next step-change towards the full electrification of Africa’s commercial motorbike fleet is to forge partnerships with flagship motorcycle manufacturers to build an e-motorcycle that can take to the streets across the continent while meeting customer’s needs.

“Ampersand’s biggest contribution to the ecosystem is not the motorbike but our battery tech, our software to manage huge numbers of batteries and swap operations, and our network of swap stations. The best approach for Ampersand is to focus on being an energy company, and let the motorbike companies be motorbike companies,” he says.

“Motorbike companies already have assembly lines, distribution, decades of experience building motorbikes, and the spare parts ecosystems built up,” Whale continues. “If a few of those big companies can be persuaded to embrace the Africa opportunity, we can all move quicker together, hit our climate goals, and reach the full potential of that market much sooner.”

With new government e-mobility policies growing across Africa – driven in part by high fuel import costs, draining hard currency reserves, and rising urban air pollution – Whale is optimistic that the region is ready for an e-mobility revolution. For drivers like Numukobwa Dative, the transformation is here and now.

Before becoming an e-moto driver, says Dative, she was unemployed and broke. During that time, a family member kept her financially afloat. Now, thanks to Ampersand, Dative is contributing to a savings account and can support her family. She also nurtures a dream that no longer seems out of reach.

“I hope to own a house, bought from the money I’ve saved from this motorcycle,” she says. “I want to have a beautiful family and have kids who are appreciative of my work as a taxi motorcyclist. They’ll see that I did something unique, something different from other young women.”

Howwemadeitinafrica

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