Watu Africa finances over 2,000 EVs in East Africa

From the newsletter

Watu Africa’s 2024 sustainability report shows the company financed 2,193 electric vehicles across East Africa, up from 1,055 in 2023; a 108% year-on-year increase. Uganda led with 1,039 units, followed by Rwanda (723), Kenya (406), and Tanzania (25). EVs also grew to 3.8% of all vehicles financed in 2024, compared to 1.4% in 2023, signalling steady momentum.

• The high upfront cost of EVs limits ownership, but financing models from players like Watu Africa, Mogo, and M-Kopa are making two- and three-wheelers more accessible. Riders can now own electric bodas within 12–24 months, driving faster adoption.

• Every East African country has financing tailored for two- and three-wheelers, which dominate the EV market. Four-wheelers, however, remain underserved, as banks treat them like fuel cars with high interest rates, keeping them out of reach for many.

More details

• Watu made EVs financially attractive by offering 7% interest rates for electric motorbikes compared to 8.75% for petrol bikes, reflecting the lower risk profile of EV assets. Customers also enjoyed significant affordability gains, with 57% lower down payments, 76% lower maintenance costs, and 95% lower operational costs over 18 months.

• The company’s growth ambition is clear, with a target of financing 5,000 electric bikes by 2025 while expanding strategic partnerships. Country forecasts highlight strong commitments, including Kenya (2,000), Uganda (3,600), Rwanda (1,348), and Tanzania (300), alongside three-wheeler projections of 150 in Kenya and 2,673 in Tanzania.

• Watu’s strategy extends beyond financing into infrastructure and ecosystem building, with over 76 active swap stations in Nairobi and a target of 300+ by 2024, supported by partnerships with Domino’s and Ola Energy. Riders benefit from real-time swap station information through Watu’s app, while the company works with manufacturers such as Gogo Electric, Spiro, and Arc Ride to strengthen the supply chain.

• In terms of market development and policy alignment, Watu has shown adaptability, particularly in Uganda, where it partnered with Gogo and a battery maker while investing directly in a charging corridor from Entebbe to Kampala, leading to the financing of over 2,000 e-motorbikes. In Rwanda, a regulatory ban on petrol commercial motorbikes is creating immediate demand for EVs, prompting Watu to pilot solar-powered swap stations to ensure resilience in low-grid areas. It expects to grow its numbers in Rwanda.

• Watu financed 2,193 EVs in 2024 across four markets, while M-Kopa financed more than 4,000 e-motorbikes since 2023 but only in Kenya. Watu’s strength lies in its geographic spread and diversification across East Africa, whereas M-Kopa demonstrates rapid depth of scale in a single market.

• For ecosystem and partnerships, Watu is building out battery swapping networks and manufacturer collaborations (Spiro, Arc Ride, Gogo) to create supportive infrastructure. M-Kopa, in contrast, partners with ride-hailing platforms like Bolt to create demand pull, with 5,000 motorbikes planned and more than 1,000 already delivered. Watu’s strategy grows supply-side readiness, while M-Kopa creates demand certainty.

Our take

• EV financing is unlocking access for riders and small businesses that would otherwise struggle to raise high upfront costs. It accelerates adoption and makes the technology more inclusive by spreading payments over time, allowing profitability to riders and SMEs.

• However, consumers risk exploitation when financing is paired with unregulated taxes and high interest rates. This can leave riders with heavy debt burdens that misalign with the intended purpose of affordability.

• To mitigate this, governments should introduce fair tax policies and tailored incentives for EVs, while financiers adopt transparent, flexible repayment models. Such measures would ensure both growth in adoption and genuine benefits for consumers.