So motorcycle taxis are hitting Asia's oil market

NAIROBI, Kenya — Big Oil faces a tiny enemy in Asia and Africa. The noisy two- and three-wheeled vehicles that transport billions of people are quietly going electric—reducing oil demand by a million barrels a day.

In Kenya and Rwanda, dozens of startups are racing to replace gas-guzzling motorcycle taxis with battery-powered ones. In India, more than half of all new three-wheelers sold and registered in 2023 were powered by batteries. Indonesia and Thailand are also promoting electrification. China's government began promoting electric vehicles decades ago in a bid to clean up its smog-choked cities, which explains why it has a large majority of electric two-wheelers.

The shift toward electric mobility overall has reduced global oil demand by 1.8 million barrels a day, reports BloombergNEF, a research arm of financial data and media company Bloomberg. Two- and three-wheeled vehicles account for 60 percent of that reduction.

The big shift toward tiny electric vehicles is underappreciated in the United States and Europe, where the focus has been on cars. However, the world majority does not ride on four wheels. In Nairobi and Hanoi, motorcycles serve as taxis. In Mumbai, scooters can carry a family of four. In China, millions of people ride electric bicycles.

“E-bikes are quieter, much more efficient and good for the environment,” said Jesse Forrester, founder of Mazi Mobility, which has 60 electric motorcycle taxis, known as boda-bodas, in Nairobi. Forrester's company is among several competing to establish an ecosystem of electric two-wheeled vehicles.

Elsewhere, established motorcycle makers are launching battery-operated models, including an electric scooter for under $1,800 from India-based Hero MotoCorp. Honda recently said it was investing $3.4 billion with the goal of selling 4 million electric motorcycles a year by 2030. The biggest obstacle to small electric vehicles is government policy. Countries like Mexico that subsidize oil have few two- and three-wheeled electric vehicles.

At a gas station on a highway near Nairobi, a team from ARC Ride, an electric wedding startup, was installing a cabinet that opens with a phone app. Insert an empty lithium battery, remove a fully charged one, and you're ready to go at least 90 kilometers—almost enough for a full day's work for motorcycle taxi drivers. ARC has installed 72 exchange stations in Nairobi and plans to install 25 more.

“We are interested in a solution that enables mass electric transportation,” said Felix Saro-Wiwa, director of sustainable growth at ARC Ride.

There are about 1,500 electric weddings in Kenya, a tiny fraction of the estimated 1.3 million in the country. Battery-operated vehicles are cheaper to operate, although they are about 5 percent more expensive to purchase. President William Ruto has set a target of 200,000 electric motorcycles in Kenya by 2025.

Shankar Rai, a 45-year-old father of three, drives a three-wheeled electric rickshaw nine hours a day, six days a week in Darbhanga, a rather poor Indian town near Nepal. He earns one thousand rupees ($12) a day, almost half of which goes to a friend who owns the rickshaw and loads it at night.

He is part of a $1.2 billion initiative by the Indian government to ensure that 30 percent of vehicles on the road are battery-powered by 2030. In Darbhanga, a new battery-acid rickshaw, like the one Rai drives , costs around 175 thousand rupees, or $2,100. That's half the price of one powered by natural gas. Charging the battery costs 20 rupees (25 cents), a quarter of the price of filling a tank of gasoline.

Of the approximately 55 vehicles that Karla Ramírez's motorcycle showroom sells on average each month in Mexico City, one is electric. It doesn't help that the cheapest electric model is more expensive than conventional motorcycles. Only one thousand of the 1.25 million motorcycles sold last year operated with batteries, reports the Mexican Association of Motorcycle Manufacturers and Importers. The Mexican government offers few incentives for EVs.

“Our President loves oil too much,” Ramírez grumbled.

By: This article was written by Somini Sengupta, Abdi Latif Dahir, Alex Travelli and Clifford Krauss