Exporting e-motorcycles for B2B applications in Africa

Noida-based One Electric Motorcycles is on its way to establishing a strong presence in Africa, with over 1,000 e-motorcycles on the road already, including those used by a major ride-hailing company. The company first launched its electric motorcycle ‘KRIDN’ in India in 2021 but shifted its focus to exports shortly after.

We caught up with Gaurav Uppal (CEO) and Abhijeet Shah (CTO) to get a peak into their operations, market focus and plans.

Please tell us about your current scale of operations in India and Africa.

We are based in Noida with an installed capacity for manufacturing 1,000 motorcycles monthly. We also plan to start a smaller plant in Pune. Being very close to Nhava Sheva, the Pune plant, will help streamline the logistics for exports. Effectively, we are scaling to manufacture nearly 10,000 units per month by 2024.

In Africa, we have a running assembly plant in Nairobi, Kenya, in partnership with a company called Mobius, with a capacity of nearly 500 to 800 vehicles per month. This can be expanded to 3,000 vehicles per month as required. A second assembly plant will also be operational within October 2023, with a capacity of 300 to 500 units per month. Another assembly plant will come up in Lagos, Nigeria, taking our production presence in Africa to 2 countries.

The idea is to have these small plants in multiple countries, which can be scaled up quickly. This helps with a reduction in transportation costs and better after-sales service. We will look to replicate similar set-ups in South America and Southeast Asia as phase two in 2024-25.

How many e-motorcycles do you currently have on the road in Africa?

Currently, we are spread across five African countries with 1,000 vehicles on the road. Our motorcycles engaged with the ride-hailing company have already crossed 100,000 kilometres in three weeks. We are seeding our vehicles in different countries, starting with a few units and taking time to validate the product in each market. By next year, we expect to have close to 10,000 vehicles in Africa.

At present, the adoption in Africa is mainly for B2B use cases, of which ride-hailing is the biggest application. We are also exploring package delivery via our e-motorcycles.

Please tell us more about your export operations – are you exporting CKDs that are assembled at local plants?

We are exporting CBUs (completely built units) when we start out, as it does not make sense to setup an assembly plant in a new market without getting a strong sense of the numbers we are going to need. For stage two, after initial traction, we send out SKDs (semi-knocked-down kits), as we have done for Nigeria and Benin so that the basic assembly can be done there. Finally, where we scale, like in Kenya, we export CKDs (completely knocked-down kits), wherein every component goes separately, and the whole bike is assembled locally. The shipping cost is most favourable in the case of CKDs.

What are the reasons for introducing a battery-swapping variant of KRIDN in Africa?

Going with swapping is a market-driven decision. There are two main factors behind this decision:

• First is the quality and supply of electricity. The African grid is not very mature. In many parts, only 10 to 15 per cent of people have access to good-quality electricity, which makes charging at home very uncertain and difficult. If the rider’s livelihood depends on it, you can’t risk not charging the bike at night.

• A second factor, interestingly, is finance. You would be surprised to know that in Africa, the default rate could go up to 30-40%. For this reason, the interest rates for motorcycle financing also go to 60-80 per cent. To curb that, it is important that we have batteries swapping so the riders need to come to a swapping station to swap batteries for the work the next day. This reduces the risk of default and encourages the finance companies to come on board.

What are the primary reasons behind your shift of focus to the export market?

India, Africa, and South America are primarily dominated by the same product, i.e. a robust motorcycle, 125cc – 150cc. In 2021, we started in Africa and India together. Africa, having comparatively less competition, we gained a lot more traction over there. Plus, we were hands-on there, taking people’s input and making changes accordingly.

In India, there were certain challenges with respect to frequent policy changes and competition from Chinese companies. We have also seen a few companies that are willing to burn money. Being a bootstrapped company, we were always cautious. That being said, we are not exiting India, but we have been patient. We have taken advantage of this window to develop an updated platform and a new sports model. We plan to re-enter India by Feb 2024 with our sports model and XR.

Are there any concerns you would like to highlight with respect to running the business in India as an electric vehicle startup?

• A stable policy framework– The Motor Vehicle Act, homologation norms, FAME Subsidy, PLI – all major policies need to be formalised and locked for two-three years. If the roadmap is volatile, it becomes very difficult to commit investments.

• Making the homologation process smoother– At present, homologation is centred around ICAT and ARAI; there is a huge backlog at these institutions. We feel that more agencies like IITs and NABL labs should be authorised for at least component-level certifications to simplify the process. The component-level certifications can be bundled together for the final homologation to save time and resources. Furthermore, so many new innovations can be done with an EV, like a four-wheeler ATV. There can be many multiple designs, but our motor vehicle acts don’t accommodate that. We need more flexibility to make more innovative products.

• Easing cash flow– The 18% GST on the battery is again an issue. Though we get the GST amount back through a refund, the entire mechanism can be simplified to ease the cash flow. To that end, we also recommend preferential GST refunds for EV companies in India.

What is your current company structure like?

Both of us own the entire equity as of now. We were sure we didn’t want to raise any capital prematurely. We are completely debt-free, a hundred per cent owned and profitable. We wanted to have a profitable product which is proven in multiple markets. Having achieved these benchmarks, we are now at the right stage to raise capital and accelerate our growth phase.

What kind of product and manufacturing updates are you planning as you re-enter India?

We are adding mid-drive motor options to both motorcycles- Sports and XR.

We are looking at a bigger plant and scaling our operations, supply chain and team size proportionally. As we mentioned earlier, we are going to split the capacity between two manufacturing plants in Noida and Pune for better outreach to the market. As Pune is more central and an accomplished auto hub, it makes sourcing parts easier.

This interview was first published in EVreporter Oct 2023 magazine | Full interview video

Also Read: One Electric launches its Made in India Motorcycle in Africa – targets exporting 3000 units in the first year.