Spiro to build 50,000 capacity motorcycle plant in Uganda

From the newsletter

Electric motorcycle manufacturer Spiro is set to build an assembly plant in Uganda. The factory will have a capacity to produce 50,000 motorcycles annually, and will be one of the largest in Africa once completed. Spiro launched in Uganda in July 2024, becoming one of the 11 markets in Africa in which the company operates.  

• African countries charge higher taxes on finished imported electric motorcycles than completely-knocked-down (CKD) kits. To avoid these taxes, companies like Spiro are importing CKD kits and assembling them locally, making their motorcycles cheaper.

• But Spiro will not be the only assembler in Uganda. Zembo, a startup that has raised significant investment from entities like Toyota Tsusho, does local assembly. Another startup, Gogo Electric, converts ICE motorcycles to electric ones.

More details

• The Uganda factory will be Spiro’s third major plant in Africa. The company opened a 50,000-capacity assembly plant in Kenya last year and is set to open a 100,000-capacity in Nigeria, which will be the largest on the continent. It also runs other, albeit smaller, assembly plants in Benin and Togo.

• Uganda is a rapidly growing market for electric motorcycles, with more than 3,000 currently on the country’s roads. There are more than 600,000 motorcycles in Uganda, most of which are fuel-powered. They are mainly used as taxis, especially in urban areas. Spiro targets to sell 140,000 electric motorcycles in the country by 2028. By the end of last year, it had achieved over 1,000 sales.

• Spiro, owned by Dubai-based conglomerate Equitane, has so far assembled more than 22,000 electric motorcycles to date. It operates in Kenya, Uganda, Nigeria, Benin, Rwanda and Togo. The company is planning to expand its operations to Tanzania, Ghana and Cameroon. It has also set eyes on entering India.  

• Motorcycles have received a lot of attention as one of the lowest hanging fruits for electrification due to their extensive use across Africa. There are over 27 million ICE motorbikes registered across the continent, with around 80% of them used in the motorcycle taxi industry. 

• Most electric motorcycles in Africa are imported, mainly from China. Even motorcycle companies that are moving into assembly like Spiro import most if not all of their components before assembling them locally. This means that there is usually no value addition in the process. 

• The continent’s electric motorcycle market is projected to grow from $441 million in 2023 to $2.6 billion in 2031. This growth will be propelled by a reduction in prices and persistently high fuel prices. The price of electric motorcycles (excluding the battery) has already dropped to the same level, and in some instances, below that of ICEs. 

Our take

• Uganda is a good choice for building an electric motorcycle factory. The country has a strong motorcycle taxi culture, which means demand will always be there. It is also stable politically and economically, and can be used to make motorcycles for its volatile neighbours especially, the DRC and South Sudan.

• Spiro could soon target Ethiopia for further expansion in Eastern Africa. The country, which has a population of more than 128 million, has laid the red carpet for EVs through progressive policies. It banned the importation of fuel vehicles in January 2024 and recently introduced a policy for EV charging stations.

• The withdrawal of donor funding by the US and other European countries is a threat to Africa’s EV transition. The continent has been reliant on grants and long-term concessional financing from these organizations to scale up. Without these, we are likely to see some startups struggle to stay in business.