Transportation was a cakewalk for Brook Berihun during the five years he spent in Tianjin, China studying dentistry. Tianjin, like other large Chinese cities, is home to a sprawling metro as well as a robust public transportation system for its 16 million residents.
For Brook, the primary means of transportation while studying at Tianjin Medical University was the electric motorbike – an affordable and convenient mode of transportation Brook did not know about before moving to China.
China is the largest market for electric vehicles (EVs) worldwide, and Brook’s bike was one of 350 million e-bikes registered in China in 2022.
It is a booming market that is only set to grow as governments across the globe commit to climate initiatives and green energy. In China, the commitment takes the form of tax exemptions and subsidies for EV manufacturers.
During his last year of study in Tianjin, the Chinese government enacted a policy change that obliged all e-bike owners to register their vehicles. Brook described the registration process at a local Tianjin police station as “quite fast”.
The e-bike experience made such an impression on Brook that he would not consider any other mode of transportation upon his return to Addis Ababa, especially in light of skyrocketing vehicle prices.
“I really wanted to bring my e-motorbike with me when moving back to Ethiopia three years ago,” he said.
Brook eventually learned that there were electric motorbikes available in the Ethiopian market, and bought one immediately following his return. He uses the e-bike (sold under the brand name San Polo E-Bikes) as transportation to and from his dental clinic, as well as for in-home visits with patients.
It was an affordable and efficient means of transport for the Dentist.
The e-bike served Brook for close to two years before he recently upgraded to a new e-bike brand making the rounds in town – Dodai. He says he bought the new e-bike for its advanced battery technology.
Unfortunately, Brook’s new purchase was spoiled by an ordinance from the Addis Ababa Transport Bureau prohibiting the use of electric motorbikes in the city.
The ordinance issued in late August 2023 introduced new rules for e-bikes and e-bike owners. Any vehicle with a top speed of more than 20 kilometers per hour now has to carry insurance coverage, and drivers must carry a valid license.
The requirements seemed reasonable to Brook, and he was one of many who made their way to the Transport Bureau to register their e-bikes.
This, however, is when it became clear to Brook that he was no longer in China.
“There is no legal framework concerning these types of vehicles,” was the response from officials at the Transport Bureau. It is a response that has not changed in the slightest for the last three months, leaving Brook and other e-bike enthusiasts to figure out other means of transport in the congested capital.
The new rules were a shock to investors in Ethiopia’s nascent EV-assembling industry as well.
Dodai Manufacturing Plc is among those hardest hit by the ban in Addis Ababa. Dodai (roughly translating to ‘foundation’ in Japanese) had barely begun selling its lithium-battery e-bikes in Ethiopia when heads of the Transport Bureau announced the policy.
The manufacturer was established this year with USD 2.2 million in capital raised from a dozen foreign investors – most of them Japanese.
The investors were drawn to the Ethiopian market by the untapped potential, the chronic transportation problems, and the absence of competition, according to Yuma Sasaki, CEO.
Dodai offers lithium-battery e-bikes, which have longer battery life and travel range than their lead-battery counterparts, as well as higher top speeds.
Dodai has been hit hard by the Transport Bureau ban. Initially, the company offered its e-bikes at 200,000 birr apiece, significantly higher than market prices for other e-bikes. Prices have since dropped to a discounted 150,000 birr.
Dodai sold 70 units before the ban was enacted, according to Sasaki.
“Had it not been for the ban, we would have sold at least 400 by now with 50 employees,” said the CEO.
The company currently employs 20 individuals and has close to 170 e-bikes in stock.
“We are a startup, so we don’t expect profit and repatriation for the next three to four years,” said Sasaki. “We focus on the team now.”
The CEO told The Reporter that Dodai was in the process of raising an additional USD 10 million in capital from investors before Transport officials made their decision.
The change of stance on e-bikes in the country’s largest city stands in direct contrast with the federal government’s climate agenda. Over the last few years, the administration has loudly committed to or undertaken several climate-friendly initiatives, including the implementation of significantly lower excise taxes on EVs.
“The ban on e-bikes is bizarre,” said Bereket Tesfaye, who used to serve as general manager for Tom E-bike, one of the few e-bike assemblers operating in the country.
Bereket currently works on energy projects with GIZ, the German international development organization.
He told The Reporter that the Addis Ababa City Administration has banned e-bikes on several occasions over the past year, making business for assemblers like Tom E-bike untenable.
Bereket believes e-bikes are the most efficient and affordable way to curb Addis Ababa’s transportation issues. He points to the success of e-bikes in crowded cities in Asia, as well as in neighboring Kenya, to back his argument.
The energy expert also criticizes officials’ plans to introduce electric buses to Addis Ababa.
Back in 2020, federal officials announced plans to operate 1,500 electric buses under the World Bank-funded Bus Rapid Transit (BRT) system in the capital. Bereket argues the initiative is misguided.
“As part of my work, I study green mobility all around the world,” he said. “No developing country can afford electric buses. Even the technology behind electric buses has not matured yet. How are people going to move around until the technology matures and Ethiopia is able to afford it?”
Bereket makes a good point.
High-end electric buses from manufacturers in Germany or France would cost well over half a million USD apiece, with some models selling for as much as USD 750,000. More affordable electric buses manufactured in China have starting prices of USD 350,000. Compare that to around USD 30,000 for a brand-new diesel-powered bus of similar size.
Bereket also argues that Addis Ababa does not have the power infrastructure to sustain a large electric bus fleet.
“It would take more electrical energy than is currently consumed in Addis Ababa to charge a few hundred electric buses,” he said.
The concerns from experts are mirrored by investors.
Yasuhirohiro Yoshizawa is a co-founder and director of Inclusion Japan, a venture capital and private equity firm based in Tokyo. He is the major shareholder in Dodai Manufacturing, investing close to USD 1.5 million in the venture. It is in addition to another USD half a million he invested into a similar venture in Djibouti, before it failed.
Yoshizawa also has interests in other Addis Ababa-based businesses such as GoodayOn, Addis Softwares, and Gebeya Inc. He says the market potential encouraged him to diversify and deepen his investments in the country.
However, the e-bike ban from the Addis Ababa Transport Bureau has taken the shine off some of the investments.
“To give you my honest opinion, we were very discouraged by the ban,” Yoshizawa told The Reporter. “We know a lot of other investors in Japan, and we were telling them to come here and invest, but then the ban came.”
He told The Reporter that in recent months, he and his colleague Sasaki had invited several investors to Ethiopia. The responses were positive, and the investors pledged USD 10 million, according to Yoshizawa.
The ban on e-bikes, however, has scared these investors away and curbed Dodai’s potential for growth, he disclosed.
The investor reluctance comes as the country continues to struggle with the chronic foreign currency shortages straining not only nascent industries, but veterans as well. The forex shortages have forced Moha Soft Drinks Plc (bottler of Pepsi products under MIDROC Ethiopia) to the verge of shutdown after nearly three decades of operation.
Heads of the Addis Ababa Transport Bureau did not respond to queries from The Reporter about the e-bike dilemma or the questions raised about electric buses.
Kejela Mekonnen, director of non-motorized transport expansion at the Bureau, however, was willing to provide an overview of his office’s ambitious 10-year green transport strategy.
The strategy focuses on developing pedestrian walkways and bicycle lanes in the capital, with officials targeting 200 kilometers of bike lanes within the decade. Three years in, less than 25 kilometers have been built with funding from the City Administration. US-based finance and media giant Bloomberg has pledged funding for an additional 18 kilometers.
Efforts to build and expand pedestrian walkways have also stalled, and plans to procure 10,000 bicycles for an envisioned city-wide bike rental service have made little progress.
Meanwhile, investors in Dodai and other e-bike assemblers expect officials to offer a solution that would encourage them to continue and recoup their investments, and commuters like Brook have to find another way to cope with Addis Ababa’s daily transportation ordeal.