Enterprise

Firm bets on lease model to boost electric tuk tuks uptake

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Arc Ride Kenya Limited where tuk tuks are being converted to electric ones. PHOTO | DIANA NGILA | NMG

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Summary

  • Mr Hesmondhalgh says Arc Ride has found a way to address the travel range concerns raised by enabling operators of their tuk tuks and motorcycles to swap batteries.
  • One can replace a used-up battery with a fully charged one at designated charging points or stations within a few minutes.
  • "Buyers will save a lot of money on fuel and maintenance as fuel prices keep rising yet we can create a more consistent electricity price to charge the vehicles,”Mr Hesmondhalgh explained.


Arc Ride Kenya, a tech start-up a little over a year old is betting on green technology, coupled with its business model to solve one of Kenya’s age-old problems - its high-polluting and chaotic transport sector.

The firm believes the future of transportation will be electric and it has picked Nairobi for its pilot programme before expanding to other counties and eventually other countries.

When the Business Daily visited its plant off Enterprise Road, a group of engineers was busy assembling electric three-wheelers (commonly referred to as tuk tuks), and motorcycles, betting on the technology to cut down on carbon footprint in the transport industry.

Established in February 2020, Arc Ride began its operations in Nairobi early this year.

“We have been operating for the last six months and now is the time to scale up our pilot project,” says the firm’s co-founder and head of business development Bede Hesmondhalgh.

To date, the company has assembled 20 electric tuk tuks and 15 electric motorcycles for the pilot phase using parts imported from India.

For the longest time, travel range concerns have been one of the biggest hurdles to the uptake of electric vehicles. Mr Hesmondhalgh, however, says Arc Ride has found a way around the problem by enabling operators of their tuk tuks and motorcycles to swap batteries.

This means that one can replace a used-up battery with a fully charged one at designated charging points or stations within a few minutes.

Alternatively, operators can charge the motorcycles using normal household electrical outlets.

“They consume fewer units. For instance, two units of power can last 100 kilometres. Buyers will save a lot of money on fuel and maintenance as fuel prices keep rising yet we can create a more consistent electricity price to charge the vehicles,” he explained.

In the pilot phase, Arc Ride has installed 15 charging stations across the capital city and its suburbs including in Westlands, Rongai, Kitengela, Eastleigh and at the firm’s warehouse in Nairobi South.

The plan to establish Arc Ride was conceived in Rwanda while Mr Hesmondhalgh was working for AOC Power, a solar mini-grid provider in the East African country.

Together with two other colleagues, they started looking into coming up with electric vehicles to tackle transport issues across growing cities in East Africa.

“The best route was by introducing electric vehicles, electric motorbikes, scooters, and tuk tuks were the most cost-effective ways to start implementing the idea,” he explains.

“Nairobi is East Africa’s commercial hub and we wanted to use it as the foundation for the business before expanding outwards. That is why we are doing our pilot here,” he adds.

Partnerships

In the pilot programme, the company has engaged Nairobi Bottlers, Get Boda, Kibanda Top Up, and only recently signed a partnership with Sendy to introduce an electric fleet for marketplace cargo delivery.

The agreement will see Sendy introduce the three-wheelers in the last mile delivery service with Arc Ride providing four of the electric tuk tuks for a two-month pilot project.

In future Arc Ride plans to engage more courier companies where they will offer fleet management service as well as leasing with the cost of the electric motorcycles as low as Sh750 a day.

The fleet will be insured with maintenance packages at a quarter the cost of normal boda bodas.

“If anyone wants to lease or rent the vehicles, we will provide that service. We have already been in conversation with DHL, G4S, and a number of banks,” states Mr Hesmondhalgh.

Scaling up

He adds that they plan to introduce 250 new and improved electric motorcycles into the Kenyan market by September, then scale up the production to more than 3,000 in the next 18 months while setting up more charging infrastructure.

However, the ultimate idea is to introduce a range of vehicles by scaling up to vans and trucks and expanding into neighbouring countries as there is momentum towards electric vehicles, and people want to know that they are reliable and affordable.

He explains that at the moment the cost is prohibitive in bringing in the parts making it too early to begin commercial production hence the tilt towards fleet management service as it is relatively cheaper.

“At the moment we are not selling the tuk tuks because of the prohibitive costs but as we scale up, we will bring the cost down and hopefully source more materials locally to be competitive with others like Bajaj.”