Tanzanian electric tricycle firm reaches $1m revenue

From the newsletter

TRi, a Tanzanian electric tricycle company, has generated more than $1 million revenue, highlighting growing demand in the East African country. TRi co-founder Niko Kadjaia said the company hit the milestone in 16 months. The revenue milestone comes as he revealed that demand for electric tricycles is triple what the company can supply at the moment. 

• Tanzania is one of the biggest markets for tricycles in Africa, with over 500,000 operating in the country. The majority of these tricycles, commonly known as tuk-tuks, run on petrol or Compressed Natural Gas (CNG). 

• Companies like TRi, eMo Mobility, ELEMO and Alpha e-Mobility have introduced electric tuk-tuks in the country. They are quickly gaining traction due to their low operating cost.   

More details

• TRī was founded in 2021 by Niko Kadjaia and Kunze Peng with an aim of making electric tuk-tuks accessible to thousands of Tanzanians, especially in the capital Dar es Salaam. The company uses a B2C lease-to-own scheme to lower the upfront cost of buying the tuk-tuks. 

• According to Mr Kadjaia, the admission of the company into the Accelerate Africa startup accelerator programme last year was pivotal in its meteoric growth over the last 16 months. Run by organizations like Future Africa and VC4A, the program helps startups scale and connect with investors and partners to achieve $1 million in revenue within 18 months of completion.

• “When we joined Accelerate Africa last year, the goal was bold and clear: reach $1m in revenue within 12–18 months after the program. Fast forward to today: We've passed the $1 million milestone. It took us 16 months and was powered by our 2nd generation tuk-tuk, the E2. We made it with a product and in a market most had overlooked,” said Mr Kadjaia. 

• Mr Kadjaia added that demand for electric tuk-tuks in Tanzania is outpacing supply by more than three times, with the company now targeting on reaching net profitability next year. He hinted that the company will introduce new products and launch in new markets for the first time to hit its growth targets. 

• TRi’s rapid growth highlights the potential of electric three-wheelers on the continent. Three-wheelers are a common mode of transport across Africa, where they are used to transport both passengers and cargo, mainly over short distances. They are increasingly popular as they have a larger carrying capacity than motorcycles and cheaper than four-wheel vehicles. They also are also better at navigating muddy rural roads in Africa than motorcycles and scooters, which is leading to increased demand.

• While the majority of electric tuk-tuks being deployed in Africa are imported, mainly from China and India, local assembly is growing as OEMs look to cut costs. For example, Canadian company Alpha E-Mobility, which launched in Kenya last month, will be making their vehicles at KVM, one of Kenya’s top vehicle assemblers. Local assembly is also taking root in other countries like Nigeria, Ghana, Tanzania and Ethiopia, which have vast three-wheeler fleets. 

Our take

• To meet the high demand, TRi will need to secure more capital and optimize its supply chain to increase the number of tuk-tuks it can produce and sell. This should ideally involve setting up a larger assembly facility and forming new partnerships.

• Local assembly and manufacturing will be key for electric tuk-tuk companies to lower costs and better adapt their products to the specific needs and conditions of the African market.

• Tuk-tuks are used heavily in short-haul transport. This means that battery-swapping hubs are essential to drive adoption, creating opportunities for energy-as-a-service models. Models that can be charged with home solar will also likely be popular.