PayGo for E-bikes Partnership

Investing in Impact

P4G has provided this partnership with US $792,500 in catalytic grant funding. 

In Kenya, where motorbikes are a popular form of transportation but pollute 10 times more on average than cars, the government has set a goal of ensuring 5% of bikes are electric by 2025. This goal requires rapid scaling, and P4G’s PayGo for E-bikes partnership is addressing two key barriers to that effort: customer affordability, and range and charging anxiety. 

To address the affordability barrier, the partnership will offer PayGo options for drivers to switch to electric bikes. While the current up-front purchase price of e-bikes is too expensive for mass adoption, offering a daily PayGo rate for drivers to use the e-bike and charge it will cost less than existing costs of petrol bike financing, fuel and maintenance. As of Mar 2023, the partnership had rolled out 60 e-bikes, is assembling 280 more, and is ordering an additional 500 for later in the year. Scale up has been slower than anticipated due to supply chain issues and delays in testing.

Range and charging anxiety, which is the driver’s concern that they will have insufficient power to reach their destination or they won’t be able to find a charging location, will be alleviated by charging stations throughout the city. The partnership will offer PayGo electric bike battery charging primarily using Kenya’s majority renewable energy powered grid at small and medium enterprises, so any e-bike drivers can easily recharge at their convenience. PayGo for E-bikes has installed 8 charging stations at 3 fuel stations for testing, as they aim to make improvements before deploying the full 100 units. 

The partnership has also completed research which found that battery swap models are well suited to business-to-business use-cases and consolidated markets with high density of electric 2-wheelers and low upfront costs, whereas the battery charge model works in more low-income and fragmented markets. Currently, Kenya’s market segmentation allows for both models, but favors a charge model for the majority of drivers. With either model, the speed of adoption of eBikes could accelerate faster with a shift with positive policy and regulatory reform, so the partnership plans to use this research to advocate for Kenya to adopt a specific e-mobility tariff. 

PayGo for E-bikes also studied gender inclusivity, finding that the primary barriers are safety concerns and social norms, including lack of access to financing. While the study emphasizes the need for sustained and coordinated stakeholder initiatives to enable women’s participation in the sector, it also identifies short-term opportunities such as delivery and day-time focused services as a gateway option and effective messaging through women’s savings groups and e-commerce platforms that highlights women’s primary motivations of gaining independence and earning a predictable income.