Inside Spiro’s electrical bike manufacturing in Kenya

On October 6 and seven, I met the Spiro group together with its CEO, Kaushik Burman, on the firm’s head workplace in Westlands. Throughout the group’s go to to Nairobi, they walked guests by their meeting plant alongside Mombasa Street.

Spiro is striving to determine itself because the premier electrical car (EV) firm throughout East and West Africa, specializing in the large-scale electrification of two-wheelers. The startup, which is backed by the Equitane Group with $100 million in funding, focuses completely on electrical motorbikes and the corresponding infrastructure essential to help motorcycle-taxi (boda-boda) operations.   

The cornerstone of Spiro’s technique is its battery-as-a-service mannequin, a vertically built-in system the place the corporate retains possession of battery belongings and manages a community of automated swap stations. This mannequin immediately addresses the 2 major boundaries to EV adoption amongst Africa’s boda-boda operators: excessive upfront battery prices and vary nervousness stemming from unreliable charging infrastructure. Spiro ensures minimal downtime for riders by providing a sub-minute battery change service. 

This method transforms the whole price of possession calculus for riders, yielding a considerable discount in operational bills, starting from 30% to 50% in comparison with conventional inner combustion engine (ICE) autos. 

The financial savings come from slicing out gasoline and decreasing upkeep, making the electrical choice more cost effective over time. Spiro earns income from this by a KES 290 ($2.24) swap price for a totally charged battery. The setup turns Spiro right into a utility supplier, managing each power and maintenance. In contrast to rivals reminiscent of Roam, riders can’t cost Spiro batteries at residence, as all swaps happen at its Petrocity petrol stations. 

The Nairobi manufacturing centre 

Spiro’s push for native manufacturing centres on its meeting plant alongside Mombasa Street in Nairobi. The positioning is a part of a broader plan to transition from full imports to native meeting, thereby constructing a provide chain that retains extra worth inside the area.

The corporate operates 4 vegetation throughout Kenya, Rwanda, Uganda, and Nigeria, a regional community that cuts transport prices and creates native jobs.

In Nairobi, the standout function is an all-women meeting line. Girls make up greater than 40% of Spiro’s manufacturing workforce, each direct and oblique, breaking into an area lengthy dominated by males.

A technician informed me that the electrical bike components arrive as kits. Round 20 to 40 staff, most of them ladies, examine the motor windings, bearings, and seals for waterproofing. 

The motor is manufactured domestically. 

They match the motor controller, wiring, battery modules, and the administration system. Then comes the body, suspension, brakes, and show. Every bike is bench-tested, then road-tested earlier than supply.

“About 20 of us work on the technical aspect,” one technician stated, tightening a bolt.

Battery administration and circularity

Spiro makes use of proprietary know-how, together with IoT-based platforms for real-time monitoring, sensible diagnostics and swap optimisation, guaranteeing the protection and effectivity of its 100,000 batteries in circulation.   

As soon as batteries attain their end-of-life cycle, usually round 80% of their authentic capability, making them unsuitable for mobility, they’re repurposed.   

Spiro signed a cope with Ace Inexperienced Recycling to deal with the recycling of end-of-life lithium-ion batteries and waste supplies generated from manufacturing operations. 

Native meeting has helped lower the prices, however a lot of the supplies used to assemble electrical motor bikes are nonetheless imported, with solely 30-40% sourced domestically. 

The important thing bottleneck is the battery cell, which constitutes 35–40% of the car price and continues to be fully imported. So, though Spiro’s native meeting leverages tax incentives and minimises logistics prices for bulk shipments, the corporate stays extremely uncovered to world worth fluctuations and provide chain disruptions for the costliest enter element.   

Product specs 

Spiro sells electrical bike fashions particularly tailor-made for the demanding wants of boda-boda operators.  The flagship mannequin, the EKON 450M1, incorporates a powertrain with a nominal energy of 4.5 kW (peaking at 9 kW), a prime pace of lower than 85 km/h, and a variety of 80-100 km per battery. 

The older Spiro Commando mannequin provided 6.5 kW energy and a prime pace of 80 km/h, attaining a variety of 40 km per 2 kWh battery. 

Each fashions combine options such pretty much as good suspension to deal with tough African terrain (though most are utilized in metropolis setups with tarmac roads), LED headlights, and metallic storage compartments with built-in USB charging ports. 

Operational metrics 

The size of Spiro’s operation underlines its standing as a market chief, though official statistics present a extremely dynamic and quickly increasing trajectory.

Spiro controls about 21% of Kenya’s complete bike market, together with petrol fashions. It holds over 90% of all electrical autos within the nation, together with bikes and automobiles,  and 52% of all electrical motorbikes.

It has about 50,000 electrical bikes in circulation throughout its markets, which represents an bold near-term goal fairly than present deployment. Latest operational stories point out a fleet of about 34,000 electrical motorbikes deployed throughout Kenya, Uganda, and Rwanda (the remainder of the bikes are due to this fact unfold throughout its West African markets). The corporate’s progress plan, codenamed “Venture Thunder,” needs to hit a goal of 100,000 bikes.  

To facilitate this demanding operational tempo, the place industrial riders usually exceed 150 km per day and generally attain 180 km per day on Spiro bikes, the corporate maintains a excessive density of battery belongings. Spiro claims to have deployed over 100,000 batteries throughout its community and processed 23 million+ battery swaps. 

The ratio of batteries to bikes confirms that the corporate maintains important power stock redundancy, which is an enormous upfront capital expenditure required to ensure sub-minute swap instances and eradicate vary nervousness for high-utilisation industrial operators. 

The infrastructure itself consists of over 1,000 swap stations. Roughly 200 of them are in Kenya, concentrated within the western a part of the nation. 

How a lot does a battery swap price?

Spiro’s enterprise is capital-heavy, with huge upfront prices unfold throughout three belongings: the bikes, the batteries, and the swap stations. Its mannequin claims to take away the burden of battery possession from riders by conserving the batteries in-house and turning what could be a purchase order right into a long-term power subscription.

For riders, prices are predictable and often decrease than fuelling a petroleum bike. An 80–100 km journey on a Spiro bike prices about $2.24, which is the value of 1 battery swap. In distinction, a typical petrol bike with an 11-litre tank (at KES 185 per litre) spends about $15.60 to cowl 500 km, making Spiro roughly 30–40% cheaper per kilometre.

Debt and institutional backing

Spiro has raised greater than $180 million since 2022 throughout a number of rounds. Its different backers embody the Afreximbank, Société Générale and the Africa Transformation and Industrialisation Fund.

In 2023, it secured $60 million in debt from Société Générale and GuarantCo to develop its fleet and battery community in Kenya and Uganda. In 2024, it raised a further $50 million from Afreximbank to help its entry into Cameroon and Morocco, in addition to scale its automated swap community.

The corporate’s reliance on improvement finance establishments offers it entry to affected person capital and credibility in local weather finance circles, one thing few non-public buyers are prepared to supply for such capital-heavy infrastructure.

Asset financing and rider acquisition

Whereas Spiro retains the asset threat of the battery, the corporate outsources the retail credit score threat for the bodily car by strategic partnerships with car asset financiers, together with Kenya Business Financial institution (KCB), Mogo and Watu Credit score. 

In response to the execs at its meeting plant, this association allows rider acquisition by financing choices, making the EV accessible even to these with out conventional banking entry by facilitating funds by cellular cash. 

In Kenya, the preliminary money retail worth of a Spiro EV bike is comparatively costly at round KES 295,000 (roughly $2,290), with a down fee of KES 20,000 required for credit score purchases.   

Given the considerably decrease money costs reported, with a couple of clients who informed me that they bought their items for KES KES 195,000 ($1,509), the $2,290 determine most precisely represents the general mortgage price of the EV over the total mortgage time period (e.g., 24 to 30 months). The price covers the principal quantity, high-risk rates of interest inherent in micro-asset financing, complete insurance coverage, and logbook switch charges, all of that are managed by the financing associate. 

Spiro has since launched the EKON electrical bike in Rwanda at simply $500. This pricing is a calculated manoeuvre to dominate the Kigali market forward of the federal government’s mandate requiring all new public transport registrations to be electrical. 

Its command centre on the Nairobi head workplace is run by a group that tracks stay information like bike vary, swap station standing, and fee information. This visibility, stated Raymond Kitunga, Spiro’s deputy nation head for Kenya, helps the corporate work with asset financiers. “They should know the type of clients they’re backing,” he stated.

How does the market execution in Kenya appear to be?

Kenya is Spiro’s primary base, residence to its headquarters and primary meeting plant in Nairobi. The corporate started operations in Mombasa earlier than increasing into Nairobi’s outskirts, Kiambu, Kajiado, and Machakos, and later into Eldoret and Kisumu.

Spiro now runs greater than 200 swap stations throughout Kenya, supported by asset financing offers with Watu Credit score, KCB, and Mogo.

On the plant, I met a rider named Kelvin, who was accumulating his new bike. He had paid a KES 25,000 deposit (about $190) by Mogo and can clear the steadiness by day by day instalments of KES 450 (about $3.45) over 18 months, a complete of roughly KES 283,000 ($2,180).

He stated he deliberate to make use of the bike for boda-boda work and had already utilized to hitch Uber as a rider. “I can handle the funds,” he informed me as he rode away.