The Right Kind of Financing to Drive Electric Mobility in Africa
I’m excited about electric vehicles. Part of this is because I’m a walking stereotype: a US west-coast Stanford grad that works in tech and drives a Tesla. Even more cliché is that I’m an Asian-American entrepreneur, I’ve spent a decade trying to save the world with clean water, and I publish cringe-worthy YouTube videos of “willing guests” doing Caraoke with me in that Tesla. My favorite contemporary music genre is Journey, and my go-to hot beverage is a matcha latte. With oat milk.
You might assume my enthusiasm for electric vehicles (EVs) is because I like cool gadgets, but the real reason I’m excited about electric mobility is that it’s potentially transformative: mitigating climate change ✅; the view of Kilimanjaro from a future Nairobi without vehicles that spew black exhaust ✅; another way Africa could leapfrog conventional paths to development ✅; accelerating the transition to cleaner energy for the fastest growing continent✅.
I got more worked up when I realized that our company’s core business model could accelerate the adoption of electric vehicles across Africa. Our company, Untapped, provides Smart Asset Financing (SAF) which shifts the upfront cost of hard-to-finance equipment to more affordable pay-as-you-go models for micro-entrepreneurs and small businesses. This matters in capital-strapped African markets and is why Smart Asset Financing plays a key role in expanding economic empowerment across the continent.
For EVs, SAF is being applied to make things like electric motorcycles, cars, and trucks more affordable. It does this by making the upfront and daily cost of EVs equivalent to or less than petrol vehicles for value-conscious African businesses and micro-entrepreneurs. Americans and Europeans can preach to Africans as much as they want about climate change, but broad adoption of EVs will only happen when an average African worker or business can easily boost their income by switching to EVs.
By both accident and design, we at Untapped have pulled together three key components that can do this at scale:
1. A proven network of mobility partners managing thousands of vehicles across numerous markets in Africa;
2. Investments in a range of early-stage EV innovators in East, West, and Southern Africa; and
3. Financing that translates the high upfront cost of adopting EV into a daily out-of-pocket that is equivalent to or less than petrol
All three legs of the stool are necessary for adoption to accelerate — EV innovators face the challenge to scale operationally while those managing large networks of petrol vehicles are rightfully focused on profitability and scale. Untapped Smart Asset Financing and some coordination backed by data-driven finance can bring all three together. This past month, we announced a new Climate Action Initiative to do exactly that in a coordinated and deliberate initiative to drive the adoption of EVs.
Untapped isn’t “pivoting” or changing our business model. The climate initiative is simply taking what we already do and putting extra focus into electric vehicles while leveraging the networks we’ve already built. In the next two years, we will earmark a minimum of $20M of our Smart Asset Financing capital deployments to assets that support climate action — mostly EVs — and we will seek partnerships with other funders to grow this Climate Action Facility as much as the market can absorb.
Our goal is to deploy a modest 10,000 EVs in the next couple of years through our network of mobility partners and scale with funding partners keen to support climate-friendly innovations that can profitably scale with measurable impact. Perhaps, in 2025 Untapped will be one of many profitable and scalable climate-friendly investors in Africa. That’s already a win. But if I have any say, Untapped Smart Asset Financing will be a major force for accelerating EV adoption by providing the right kind of capital so that everyone in Africa and beyond benefits from an electric-driven future.
Want to be a part of our Climate Action Initiative? Get in touch with me at jim@untapped-global.com and visit us at untapped-global.com.
