Why EV-only ride-hailing fleets are rising

April 11, 2025

From the newsletter

Nigerian electric mobility startup Foltï Technologies Limited has launched eDryv, the latest in a growing list of firms that provide EV-only ride-hailing services. The service will start with 231 EVs and three charging stations and will begin accepting bookings on Sunday, April 13, 2025, starting in the Lagos Island area with further expansion across Nigeria in the pipeline. 

  • Africa’s ride-hailing industry is dominated by global firms such as Uber and Bolt. But an increasing number of local startups are entering the lucrative business, some with disruptive models. The most notable is the growing shift to EVs, with some offering fleets exclusively made up of EVs. 

  • EVs are cheaper to run on a daily basis compared to fuel vehicles, making them attractive to taxi operators especially in Nigeria, where fuel prices have become prohibitive. There are millions of taxi operators in Africa, meaning that replacing ICE taxis with EVs could be pivotal in growing electric mobility on the continent. 

More details

  • Foltï plans to expand eDryv to other cities in the coming months and has already initiated the process of setting up an EV assembly plant in Abeokuta, Ogun State. Backed by the National Automotive Design and Development. Council (NADDC), the plant is expected to begin assembling EVs locally by 2026 or 2027. The company will be charging the EVs using its own solar PV installations. 

  • It joins other companies like EV Taxi (Nigeria), Rideence Africa (Kenya), Vaya Africa (Zimbabwe), SolarTaxi (Ghana), and Mbay Mobility (Senegal) that are pioneering EV ride-hailing services in Africa. The main business model is leasing, where drivers pay a deposit and daily fee to use the EV. However, some of the firms provide rent-to-own options for their customers. 

  • There are millions of taxis in Africa, and they are projected to grow further in the coming decades. The value of the industry is expected to reach $3.1 billion by 2030, according to Statista. The vast majority of taxis run on fossil fuels, which remain expensive. EVs are providing an economical alternative for taxi operators, whose profit margins are heavily affected by fluctuating fuel prices.  

  • EV taxis have the potential to not only lower costs for operators but also commuters. Ride-hailing services remain expensive in Africa mainly due to high fuel prices, commissions charged by platform providers and traffic gridlocks in major towns. EVs, which are more cost-effective per kilometre, could help reduce fares. 

  • But the major challenge that EV taxi companies face is the cost of the vehicles, which remains high, with the price of EVs often more than double that of their fuel equivalents. This means that most taxi operators cannot afford to buy these vehicles upfront. For startups like Foltï however, leasing provides a viable alternative at the moment even as EV prices are expected to continue to drop. 

  • Established ride hailing companies like Uber, whose markets in sub-Saharan Africa are Kenya, Nigeria, Ivory Coast, Ghana, Uganda, Tanzania and South Africa, have warmed up to EVs and have started to incorporate them in their fleet in Africa. When it launched its EVtaxis in Kenya in 2023, Uber said its drivers would see a 30-35% drop in their operating costs, and users of the platform will pay 15-20% less. 

Our take

  • Local startups with innovative business models such as leasing and rent-to-own could disrupt the dominance of global ride-hailing firms such as Uber and Bolt in Africa by offering more affordable and tailored solutions for African markets. 

  • The decline in EV prices - a trend that is predicted to continue for the next few years - will boost the adoption of EV taxis. Further, operating costs could drop further due to cheap renewable energy, which is driving down electricity prices. 

  • The depreciation rate of EVs is currently higher compared to that of fuel vehicles. This means their resale value is comparatively lower. This could see taxi operators increasingly prefer leasing EVs than buying to avoid shouldering high upfront costs for a rapidly depreciating asset.