The electric bus company BasiGo is gearing up to start local production by the end of this year as it eyes what it says will be an explosion in demand for electric buses in the country.
The firm, which together with two public service vehicle operators, has been piloting two buses on two routes in Nairobi's Eastlands area and recently imported another 15 units that will now be deployed across different city routes.
The company said it has partnered with the Associated Vehicle Assemblers (AVA) for the use of its auto assembly plant in Mombasa for the production of electric buses.
"Our strategy is to work with existing plants - AVA in Mombasa. They have the expertise for the last 50 years in assembling and are already doing multi-brand assembly of buses and trucks," said BasiGo Chief Revenue Officer Moses Nderitu.
"Instead of setting up a plant, which is cost heavy and the market is still small, we will work with the companies that have capacity."
It will assemble 33-seater buses compared to the 25-seaters used in the pilot project, informed by feedback from Public Service Vehicle (PSV) operators.
The locally assembled buses will also have the higher ground clearance for ease of driving on Kenyan roads where the size of bumps, for instance, is not standardised.
The firm early this year raised Sh516 million ($4.3 million) in a second round of funding from several Silicon Valley investors, which will be used to finance the local assembly as well as set up charging the infrastructure.
Mr Nderitu said the units that BasiGo imported in November were not fully built, with some of the components to be fitted at the AVA plant in Mombasa.
"The first step in getting ready to start assembly locally is the 15 buses that have already come. They will go to AVA for finishing. All the interiors, telematics and technology will be installed at AVA," he said. "By quarter three, the next units that we bring in will come as semi-built units, and assembly will be done in Mombasa. That way, we will start attracting tax benefits. We are also lobbying the government to classify the electricity that these buses use as local content and as long as local content is high, we will get benefits of tax rebates."
The firm has been piloting two buses, plying the North Airport Road to Allsops and the Dandora-City Stadium routes.
According to BasiGo, the two vehicles have over the pilot period done 120,000 kilometres and ferried over 150,000 passengers. The pilot phase informed the importation of an extra 15 buses as well as the planned local assembly.
The 15 buses were imported in November and are currently being readied for deployment on various city routes. Mr Nderitu explained that the buses would be split among PSV operators into three city corridors.
These are Thika Road (CBD-Juja), Waiyaki Way (CBD-Kikuyu) and Eastlands (CBD-Utawala through Jogoo Road).
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"We have had 98 per cent uptime. At some point, the two buses run for 45 days continuously without any stoppage for any service... this would be difficult for a diesel bus to achieve," said Mr Nderitu.
"One of the biggest learnings is that electric buses can operate in the country. When we started, one of the biggest fears was whether we have adequate and reliable power to run the buses. We have realised that this is possible."
He also noted that the pilot phase showed that it would be much cheaper to operate an EV bus compared to a diesel-powered one of a similar capacity. EVs require less maintenance due to the fewer moving parts.
"A diesel vehicle will fuel for between Sh8,000 and Sh12,000 depending on the size of the engine. We charge Sh20 per kilometre. So, if a bus has done 250 kilometres in a day, it will then be billed Sh5,000 for that day. The fee covers the charging and the operation and maintenance but in the case of diesel buses, this only covers fuel," he said.
While it could be substantially cheaper to run an EV bus, the acquisition costs are prohibitive and could hamper the number of EV buses on Kenyan roads.
"The upfront cost of an EV bus is about three times the price of a normal bus, and to go about these high costs, we are selling the bus for a lower price and recovering part of our money during the life of the bus through maintenance and repair," said Mr Nderitu.
"Looked at from a simple perspective, the PSV operator or Sacco buys the vehicle, but the battery remains in our books over the period that the operator will be running the bus. The operator then gets into a battery subscription and that way, we have made the electric bus affordable.
"A cash buy would cost you Sh20 million and as such, it would not be viable to be a matatu. It would not make sense. You would also have to set up the charging infrastructure if you are a cash buyer. In our case, you pay Sh5 million, and we will recover the Sh15 million over eight years, which is the guaranteed lifespan of the battery."
The firm is also investing heavily in charging infrastructure. Other than the EV matatus that will be using the charging infrastructure, BasiGo expects that the increasing popularity of EV vehicles could see growth in demand for the infrastructure and a resultant revenue stream for the company.
"The plan is to put this charging infrastructure across the city over the next two years. Our BasiGo clients running electric buses will be our anchor clients, but these charging stations will be available to you and I when electric vehicles come. So in future, it could be a revenue stream shared with the property owners - that is once the number of electric vehicles goes up," he said.
The buses are currently charged at a depot on North Airport Road, but Nderitu said with an increase in the number of buses, the infrastructure would be spread across the city.
The firm is looking at setting up charging stations in petrol stations and malls. Basgo said it is currently in talks with owners of these facilities on the three corridors that the new fleet of buses will be plying.
"We are negotiating with property owners - petrol station and mall owners - who have secure parking facilities, for instance, on Thika Road so that the buses plying Thika Road can be charged on Thika Road and closer where they terminate as opposed to a central depot.
This way, said Mr Nderitu, they can maximise the number of kilometres, especially during rush hour.
The EV industry is still in its early stages in the country. There is, however, growing interest, with firms such as KenGen and Kenya Power already starting to migrate from diesel and petrol-powered vehicles to electric ones.
The two firms are also considering investing in charging infrastructure.
There are also a host of companies that are in various stages of setting up the assembly of electric motorcycles as well as e-bicycles. Others are considering the importation of electric vehicles.
Mr Nderitu noted that the industry is poised for take-off but needs the government to give it a shot in the arm.
"What we have seen as BasiGo now is that operators are on board and are willing to embrace this technology. There are about 15 companies in the two-wheeler segments that are prototyping electric motorcycles and bicycles," he said.
"The missing link is the government that needs to come on board in the same way during the Kibaki regime when the boda boda regime was in its infancy. They were given a tax break and that has built this huge industry. That industry has moved to another level where for you to get tax breaks, you need at least 30 per cent local content."