Del Monte Kenya transitions fleet to EVs

From the newsletter

Fruit processor Del Monte Kenya is replacing its fleet of buses with electric vehicles (see our artistic illustration) as part of its clean mobility transition. The e-buses will be used to transport the company’s 6,000 workers to and from work. Del Monte has partnered with local logistics firm Metrotrans Investment to do the project. 

• Two diesel buses have already been replaced with e-buses. The company is also planning to set up electric charging stations in its facilities to power the buses.

• Del Monte is Kenya’s largest fruit processor. It owns hundreds of vehicles, which mainly it uses to transport fruits and workers. The firm is transitioning its fleet of buses in phases, but has not yet put a timeline on when it expects to complete the transition.

More details

• Del Monte is the latest company in a growing list of corporate entities in Kenya that are gradually phasing out ICE vehicles in favour of EVs. Private and public companies, in addition to a number of parastatals, are increasingly setting aside portions of their annual budgets to buy EVs.

• Last year, Kenya Power, Kenya’s electricity distribution utility, announced a budget of $2 million over a period of 3 years for the purchase of EVs. The company has also built a charging station at its head office in the capital Nairobi that is available to the public for use. It also plans to build a further 8 charging stations.

• In 2022, KenGen, Kenya’s largest power producer, unveiled 4 EVs including two SUVs and two double-cabin pickups. The EVs were the first batch in the company’s plan to electrify its fleet, which numbers hundreds of vehicles. KenGen also plans to roll out 30 EV charging stations across Kenya.

• As part of its e-mobility transition strategy, the Kenyan government also plans to establish 1,000 charging stations along major highways, 700 of which will be in urban areas and 300 in rural areas. It also wants to lease EVs for use by national organs such as the National Police Service and Kenya Prisons Services. Kenya currently leases ICE vehicles for use by government Ministries, Departments and Agencies.

• The purchases of EVs in Kenya by corporate entities is playing a major role in driving the country’s e-mobility industry, which remains in its nascent stage. There were only 3,753 registered EVs in Kenya by December 2023, according to the country’s energy regulator, the Energy and Petroleum Regulatory Authority (EPRA).

• Majority of the EVs on Kenya’s roads are electric two-wheelers, which are growing faster than any other vehicle segment. This is primarily due to the fact that the cost of buying electric two-wheelers has sharply dropped, thus encouraging more individuals to switch from ICE motorcycles. 

Our take

• Corporate entities in Kenya are better positioned to buy EVs in Kenya than individuals.  This is due to the high cost of EVs, which is beyond the reach of many ordinary Kenyans. Kenya Power for instance bought two electric pickups at a cost of $70,000 each. This is way higher than ICE pickups, whose price ranges between $19,000 and $62,000. For Kenya to achieve its e-mobility targets faster, private and public companies, state agencies, parastatals and even non-governmental organizations need to take a leading role. 

• Insufficient electricity generation capacity threatens Kenya’s ability to handle increased load demand on its grid, should demand for EVs increase rapidly. Despite its EV power demand standing at just 1.2 GWh compared to the country’s total consumption of more than 10,000 GWh, the country still rationed power in 2024 to manage the grid. Kenya must quickly increase its generation capacity to handle the growing demand from various sectors, including e-mobility.

• Kenya has an unpredictable tax regime. The country changes its tax laws annually through finance bills which are implemented at both national and county levels. These changes make it difficult for e-mobility investors to adequately plan, putting their investments at risk. Adopting a stable tax regime through implementation of the Kenya National Tax Policy will give confidence to investors.