Published on 28 May 2024

Japanese-backed firm launches electric motorbikes in Ethiopia

African two-wheeler market to cross US$5bn by 2027

Photo credit: Dodai

Dodai, an e-mobility startup in Ethiopia, founded by Japanese entrepreneur and former Uber employee Yuma Sasaki, recently launched its electric motorbikes in the capital Addis Ababa. This follows a March announcement that the company raised US$4m from a group of Japanese investors.

Dodai assembles and markets two-wheeled electric vehicles capable of traveling up to 150km per charge. The company claims its bikes can save riders 95% compared to fuel motorbikes, thanks to cheap electricity in Ethiopia and less frequent maintenance. Dodai has signed partnerships with state-owned postal services operator EthioPost and delivery outfits like Little, BeU, and Rungoo.

Investors in Dodai’s latest funding round include Japanese venture capital firms Nissay Capital and Inclusion Japan, as well as auto parts company Musashi Seimitsu. It intends to use 80% of the newly raised capital to import electric motorcycle components and lithium batteries. The rest of the funds will be directed towards covering operational expenses and software development. The company also plans to implement a battery-swapping system by the end of 2024.

Africa has over 30m commercial motorcycles, and the market is anticipated to grow to US$5.07bn by 2027 from US$3.65bn in 2021. Drivers are gradually moving to electric varieties thanks to several e-mobility startups. One of the first companies to enter this space was Rwanda-based Ampersand. It assembles electric motorbikes and batteries and has a network of swap stations in Kigali, where riders can exchange depleted batteries for fresh ones. Ampersand’s software informs riders how much charge is left in their battery and provides tips on optimising power usage based on their riding habits. Although electric bike companies save their riders money on fuel costs, the price of the motorcycles is still much higher than internal combustion engine varieties. To overcome this, Ampersand has introduced a financing option that allows riders to pay off their motorbikes over an 18-month period.

Another company in the e-mobility sector is Spiro, an electric two-wheeler manufacturer founded in 2022, with a presence in Benin, Togo, Rwanda, and Uganda. A considerable proportion of Spiro's customers are motorcycle taxi drivers. Meanwhile, Roam, a Swedish-founded company, expanded its operations last year by moving into a newly built 10,000m2 production plant located in Nairobi, Kenya’s capital. The factory is expected to eventually produce 50,000 bikes annually.

Ethiopia is pushing for the rapid expansion of electric vehicles to achieve its carbon emissions target as well as reduce its dependence on imported refined fuel. Earlier this year, the Ethiopian Ministry of Transport and Logistics announced it will not allow vehicles to be imported into the country unless they are electric. However, the Ministry did not specify when the policy will come into effect. It said efforts to establish charging stations for electric cars are also in progress.



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