Ethiopia's Dodai recently raised $7 million in funding to grow the country's electric vehicle (EV) sector. CNBC Africa's Tabitha Muthoni spoke to Yuma Sasaki, Founder of Dodai on the immediate priorities for deploying this capital, and how it will accelerate the company's growth in the EV market.
Ethiopia's Dodai recently raised $7 million in funding to grow the country's electric vehicle sector. I earlier spoke to Yuma Sasaki, Founder of Dodai on the immediate priorities for deploying this capital, and how it will accelerate the company's growth in the EV market.' of how we are using the funding. First, we're investing upgrading production capacity. Expanding our assembly factory in Addis Ababa will allow us to meet the growing demand in Ethiopia's urban transportation sector. Second, a significant part of the funding will go towards raw materials procurement for tens of thousands of e-motorbikes. Third, we are focused on building a mission-driven team. We are hiring talents that are passionate about our mission of making e-mobility accessible to everyone in Africa. That's quite an initiative that you have in place there. But let us look at what kind of return on investment you expect. What are your projections, financial projections from this investment here? Yeah, we are confident that Dodai offers a unique investment opportunity with the potential for significantly higher returns compared to other African markets like Kenya or Nigeria, where competition is already intense. Ethiopia, as the second most populous country in Africa with an average age of 19, is a blue ocean for e-mobility with very little competition. Additionally, the Ethiopian government has shown strong support for the e-mobility transition through tangible incentives. For example, businesses like ours benefit from two-year corporate tax exemption and an import duty exemption for e-mobility products. On top of that, the government recently implemented a ban on the import of fuel-powered vehicles, which we think that further accelerates the shift towards electric vehicles in the country. And over what timeline do you expect to start seeing measurable financial returns from your expansion? I used to work at Uber. So we are very mission-driven and really aggressive on reinvesting. So if our profitability is our goal, we can be profitable within three years. However, I'm sure that when we go bigger in two, three years, instead of getting profitability, we will reinvest all the money to expand further. So I'd say that if we focused on purely Ethiopia, purely electric motorbikes, then I would say two to three years of profitability, though actually that's not our plan, because we will reinvest all the money to expand our product lineups to electric three-wheelers and electric buses, as well as the geographical expansion to Cote d'Ivoire and in Senegal, other markets. And that's quite a projection you have there. But let us look at some of the challenges that you have faced and how you've been able to navigate some of them, especially in terms of the regulatory landscape here. Well, there's the regulation part, there's culture part. But one of the most fascinating challenges in Ethiopia is how similar it is to Japan. I am originally from Japan, in terms of its, let's say, cautious approach to new ideas. Much like in Japan, people here tend to be very cautious about new things and to trust these aren't, just like Japan. And at first, impressions matter a lot. This means that we can't simply import what works elsewhere. We have to figure out what's best for Ethiopia. We've had to invest, for example, not just financial resources, but also enormous effort and time into educating customers, helping them understand the benefits of e-mobility, because e-mobility is relatively new in Ethiopia, until we earn their trust. And this is kind of a painful process that requires a lot of patience, trial and error, and deep respect for local context. And yes, e-mobility is quite a new, it's a new market that you're still tapping into, you know, within the region and also in some other African countries. But with sustainability becoming a global priority, how often does DODI align with Ethiopia's renewable energy initiatives? And also, what role do you see the company playing in the country's green transition? Ethiopia is moving into that space of transitioning into green. Thank you very much for a wonderful question. My experience with off-grid solar startup in Ghana and Cote d'Ivoire previously, and our leading mobility startups, like Uber and Loop in Japan, naturally led me to focus on e-mobility in Ethiopia. So Ethiopia, as an inland company with huge hydropower resources, that means where gasoline is expensive and electricity is super cheap. So there's no better place in Africa or possibly the world where transitioning from fuel-based mobility to e-mobility makes more sense. But to make it clear, DODI's vision goes beyond Ethiopia. We are starting with e-motorbikes here, but we plan to expand to electric three-wheelers, electric buses. We'll also grow into new markets, just like mentioned, to Cote d'Ivoire, DRC, Congo, Tanzania, Senegal, driving the green transition across Africa. And Ethiopia is still on a path of economic recovery. So for you, as an investor, my question would be, why Ethiopia for you? Oh, that's a great question. So first of all, Ethiopia is a big market. It's obviously the second most populous country with an average age of 19. Two, it's a difficult market. I mentioned that Nigeria and Kenya are great markets, but since it's a great market, the competition is fierce. Competition is intense. In contrast, Ethiopia, while the market potential is big, it's a relatively new market because it's a pretty much difficult market for foreign investors. So that's why we are interested in when it's a big market and a difficult market, then the potential return is significant. Yes. And you've worked with a number of countries. You've been in Ghana. You've been to, you know, also Kenya. But let us compare what is the potential of the EV market in the region. So thank you very much. So first of all, as I mentioned, it's very simple math. When you look at the alternatives, the gasoline is expensive, even in the context of Africa. Anyway, gasoline is expensive in different markets in general in Africa, but especially Ethiopia, since it's inland and a non-natural resource in terms of oil, gasoline is expensive. At the same time, because of hydropower, we are exporting to other markets around Ethiopia, and the electricity price is significantly cheaper than any other markets in Africa. The combination of that makes Ethiopia a very attractive country for e-mobility transition.
Theme: Revolutionizing Ethiopia's Electric Vehicle Sector
Dodai, an Ethiopian electric vehicle (EV) company, has recently secured $7 million in funding to revolutionize the country's electric vehicle sector. In an exclusive interview with CNBC Africa, Yuma Sasaki, the Founder of Dodai, discussed the immediate plans for deploying the capital and how it will drive the company's growth in the burgeoning EV market. Sasaki outlined the key areas where the funding will be utilized. Firstly, a significant portion will be allocated to enhancing production capacity by expanding the assembly factory in Addis Ababa. This expansion aims to meet the increasing demand for electric vehicles in Ethiopia's urban transportation sector. Secondly, the funding will be directed towards procuring raw materials for the production of tens of thousands of e-motorbikes. Thirdly, Dodai is focused on building a team that is dedicated to the mission of democratizing e-mobility in Africa. Highlighting the promising prospects in the Ethiopian market, Sasaki expressed confidence in Dodai's potential to offer substantial returns on investment compared to other African markets like Kenya and Nigeria. With Ethiopia being the second most populous country in Africa and exhibiting minimal competition in the e-mobility sector, Sasaki sees it as a blue ocean opportunity. Driven by the support from the Ethiopian government, which provides incentives such as corporate tax exemptions and import duty waivers for e-mobility products, Dodai anticipates a swift transition towards electric vehicles in the country. The recent ban on fuel-powered vehicle imports by the government further propels the shift towards sustainable transport solutions. When questioned about the timeline for realizing financial returns from the expansion, Sasaki shared a strategic outlook. While profitability could be achieved within three years if the focus remains solely on Ethiopia and electric motorbikes, Dodai's vision extends beyond borders. The company plans to reinvest profits to introduce electric three-wheelers and buses while exploring new markets in Cote d'Ivoire and Senegal. Addressing the challenges faced in navigating Ethiopia's regulatory landscape, Sasaki drew parallels with Japan, emphasizing the need for a tailored approach to suit the local market dynamics. Educating customers about the benefits of e-mobility and earning their trust have been central to Dodai's strategies, requiring patience, experimentation, and a deep understanding of the Ethiopian context. With a global shift towards sustainability, Dodai aligns seamlessly with Ethiopia's renewable energy initiatives, leveraging the country's abundant hydropower resources and cost-effective electricity prices. Sasaki envisions Dodai's expansion beyond Ethiopia, aiming to drive the green transition across multiple African countries with a diverse range of electric vehicles. Explaining the rationale behind choosing Ethiopia as an investment destination, Sasaki highlighted the country's significant market size, youthful population, and relatively untapped potential due to limited foreign investment, setting the stage for substantial returns. In conclusion, Dodai's $7 million investment marks a significant milestone in propelling Ethiopia towards a greener and more sustainable future through the rapid adoption of electric vehicles. With a strategic roadmap and unwavering commitment to innovation, Dodai is poised to lead the electric vehicle revolution in Africa.
"Dodai's vision goes beyond Ethiopia. We are starting with e-motorbikes here, but we plan to expand to electric three-wheelers, electric buses. We'll also grow into new markets, driving the green transition across Africa."
['Dodai', 'Ethiopia', 'electric vehicle', 'EV market', 'funding', 'Yuma Sasaki', 'green transition', 'sustainability', 'investment', 'market growth']