Last-mile delivery drives EV growth

December 11, 2024

From the newsletter

Last-mile delivery, from traditional postal services to grocery deliveries, are switching to electric vehicles. Yesterday, the Moroccan postal service launched an additional 190 electric motorbikes across seven major cities. This follows the first launch of 225 electric motorcycles in 2022 after proving they are less expensive to operate.

  • The company plans to add 250 more motorcycles by the end of 2024, aiming for a total of over 650 by 2025.

  • These motorbikes have a range of 80 to 100 kilometres per charge and can meet the demands of daily mail and parcel deliveries.

More details

  • The last-mile delivery market in Africa is projected to double in the next eight years, reaching $2.78 billion. This growth is fuelled by the increasing uptake of mobile phones and internet penetration, driving demand for e-commerce. The e-commerce market is projected to surpass 150 million active users by 2025.

  • Improved internet and mobile connectivity have led to an increase in online shopping across the continent. Consumers are increasingly turning to e-commerce for a variety of products, from groceries and household goods to personal care and fashion items. Consequently, efficient last-mile delivery solutions have become crucial for logistics providers to meet these evolving consumer demands. Rapid urbanisation and the rise of on-demand services, particularly in the food and grocery delivery sectors, are also driving market growth.

  • In South Africa, Picup Technologies, an on-demand, last-mile delivery provider, plans to roll out electric scooters and three-wheelers as part of its delivery fleet in 2025.

  • In Kenya, Roam, an electric motorcycle manufacturer, has partnered with Greenspoon, a Kenyan online grocery platform. The partnership will involve the use of Roam e-bikes for delivering products to consumers.

  • There are even partnerships with telecom companies for their customer outreach programs. In South Africa, Mellowvans is supplying electric three-wheelers to Itemate Solutions to launch a new mobile store solution for African telcos after successfully deploying them to Telkom for their last-mile delivery services. In Kenya, Roam has partnered with Syokinet Solutions, an internet service provider.

  • Big retail companies like Jumia and Carrefour are also adopting electric motorbikes as part of their fleets. In Kenya, Carrefour has partnered with the ride-hailing service company Little Cab to roll out electric bikes to be used for delivering its online orders. The African e-commerce platform Jumia partnered with BILITI Electric to include three-wheelers in its delivery fleet in Kenya.

  • Logistics companies are also in the mix. In South Africa, FedEx has deployed electric delivery vehicles and is working towards a goal of transforming its global fleet to zero-emission electric vehicles by 2040.

  • Demand for electric vehicles in last-mile delivery services will continue to grow, and African countries need to localise their EV manufacturing to reap big. Morocco itself doesn't have large-scale electric motorcycle manufacturing yet, but there's growing interest in the sector. Companies like Rooder are importing and distributing electric motorcycles. Kenya has Roam, Rwanda has Ampersand, and Uganda has GoGo Electric as some of the local e-bike manufacturers positioned to tap this growing market segment.

  • The Moroccan government is actively promoting electric mobility through initiatives like developing charging infrastructure and offering some incentives for EV adoption. These incentives include exemptions from registration fees and import taxes for electric vehicles. Its central bank (Bank Al-Maghrib) is also promoting green finance to support the sector by urging banks to integrate environmental considerations into their strategies.

Our take

  • Urbanisation brings a lifestyle change. City residents, often consumed by work, have less time for other activities. This creates a demand for convenient transportation options that save time and enhance comfort. As a result, many turn to online shopping and home delivery, increasing the need for last-mile delivery services. However, cost remains an important factor, and electric motorcycles offer a more affordable delivery solution.

  • There is an opportunity for EV makers to target this growing market and meet its demand. However, this requires a different approach. Electric motorcycles need to be custom designed to withstand the demanding nature of African terrain and accommodate heavy loads.

  • Charging infrastructure providers should also move in quickly, designing appropriate locations for charging stations and battery swaps to ensure they tap into the growing market of e-bike riders.