From building three-wheelers that fit the narrow streets of Chennai, India, to establishing Africa’s largest electric vehicle assembly plants in Togo and Benin, electric vehicle company Spiro’s trajectory is initially surprising. One issue, however, afflicts both African and Indian cities: air pollution.
Indian cities are infamous for being among the most polluted in the world. But in the 2022 World Air Quality Report published by the Swiss company IQAir, Chad tops the rankings. The Central African country’s capital, N’Djamena, was identified as the most polluted city on the continent, followed closely by Burkina Faso’s capital, Ouagadougou (see chart below).
Air pollution in Africa has multiple origins. IQAir’s 2022 report, for instance, notes that 70% of the world’s wildfires occur in Africa, generating a large amount of harmful ambient particulates. In cities, old diesel-powered vehicles significantly contribute to poor air quality. According to a 2020 report from the UN Environment Programme, Africa imported the world’s highest share of used light-duty vehicles globally between 2015 and 2018.
“The used vehicles exported from richer countries are contributing to increased air pollution in developing nations and hindering efforts to mitigate the effects of climate change,” says the report.
One solution is to promote eco-friendly transportation in large cities. Another report from the World Health Organization’s Urban Health Initiative found that up to 55,000 premature deaths can be prevented in Accra, Ghana, one of Africa’s fastest-growing cities, through sustainable modes of transport.
With ventures established in Benin, Togo, Uganda, and Rwanda within just 13 months of going into operation, the company hoped to apply its manufacturing expertise from India to the African market.
But convincing customers of the benefits of EVs over traditional vehicles is a challenge. The question, for Spiro’s newly appointed CEO, Jules Samain, is how to make electric motorbikes more affordable than decade-old Yamahas.
At the heart of Spiro''s offering are battery-swapping stations. Here, any electric vehicle rider with a depleted battery can exchange it for a fully charged one for approximately CFA1000 ($1.67) in Togo and Benin.
The company claims to have deployed over 9,400 “battery-swapping” motorcycles across Togo, Benin, Uganda, and Rwanda. It has also set up swap stations in all major cities in Togo and Benin, where it initially began operations last year.
Spiro is 98% owned by the Dubai-based African Transformation and Industrialisation Fund (ATIF), which has invested $65m in the company so far, according to Samain. In addition, the company recently signed a $63m debt financing agreement with French bank Société Générale and London-based financier GuarantCo.
With this money, Spiro’s long-term goal is to roll out swap stations for use by its own motorcycles and those manufactured by other firms. Indeed, the business sees the swap stations as crucial to its business model in Africa.
“Selling motorcycles isn’t Spiro’s primary business; it serves as a facilitator for the utilisation and deployment of our swap stations,” he adds.
While motorcycle startups like Kiri EV in Kenya or Zembo in Uganda have flourished in East Africa, relatively little progress has been made in the western part of the continent, particularly in Francophone countries.
Yet, countries like Togo and Benin have a strong motorcycle mobility culture. In 2021, this even raised public health concerns in Togo, where 72% of all road deaths are motorcycle-related.
Despite the relatively high cost of the company’s motorbikes – $2400 and $1600 depending on the model, as opposed to the average monthly salaries of $600 in Benin and $900 in Togo – Spiro has introduced financial arrangements to attract taxi drivers.
Through Spiro Capital, the fintech segment of the company, it has launched a pay-as-you-go option for those unable to make the full purchase. Samain argues that taxi drivers also benefit from electric motorcycles in the long run due to reduced maintenance costs.
“On average, taxi drivers using our electric motorcycles experience a 15-20% increase in revenue compared to when they were using combustion motorcycles, as they save on maintenance expenses,” he argues.
But the cost-effectiveness of electric vehicles is also tied to the cost of electricity in the country. If electricity prices are high, EVs becomes less appealing in comparison to petrol motorcycles, which often benefit from subsidised fuel.
Samain explains that the reason the company initially established itself in Togo and Benin is due to these countries’ significant ambitions for electric mobility.
“Togo and Benin have introduced several incentives, including customs duty reductions on imports of electric mobility equipment. It’s a collaborative strategy with governments that are enthusiastic about phasing out traditional motorcycles from their countries.”
Currently, Spiro’s motorbikes are assembled in China, but by 2024, two assembly plants spanning 500 hectares each, located in special economic zones in Benin and Togo, aim to produce 1000 bikes and 2000 batteries daily respectively.
“Considering the commitments we’ve made with governments and our need for a closer supply source, we have decided to build plants in multiple countries, particularly Togo and Benin. We plan to replicate this in other countries where we are setting up operations,” Samain says.
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