Lending to e-mobility: five models, five risks

A motorcycle lessor and a battery swap network can end up in the same lending pipeline, facing the same questions. Both finance electric mobility. But the way each earns cash determines what threatens repayment, and which number a lender should ask for first.

The market is growing. The IEA estimates that about 70,000 electric two-wheelers were sold in Africa in 2025, more than 80 times the level at the start of the decade. That growth says little about an individual borrower's ability to repay. For that, I'd start with the business model.

Leasing to riders

In a lease-to-own model, riders pay daily or weekly towards owning the bike. I'd start with the share of outstanding principal on contracts more than 30 days overdue, grouped by the month they began. Compare those groups at the same point in their repayment schedules. Rapid growth can make a portfolio look healthier simply because new contracts haven't had time to fall behind.

Then follow the repossessions. How much does recovery cost, and how long before a recovered bike earns again?

Battery swap

Where riders prepay for swaps, customer arrears tell you little. I'd ask for swaps per battery per day, using the full deployed inventory, including spares. Compare that with the utilisation needed to cover operating costs, battery replacement and debt service at the actual price per swap.

Battery condition matters too. Age, charging conditions and cycles all affect useful life. An accounting depreciation schedule won't establish what a battery can still deliver.

Replacement prices also affect recovery value. BloombergNEF reports that average lithium-ion battery pack prices fell 8% to USD 108 per kWh in 2025. That's a global average across applications. Local motorcycle battery prices will differ. The direction still matters: cheaper new batteries can put pressure on used values.

Fleet operators

For companies renting vehicles to drivers or delivery platforms, I'd start with paid rental days as a share of total fleet-days over the last six months. A vehicle on hire isn't necessarily generating cash.

Then check who pays. A busy fleet dependent on one delivery platform carries a concentration risk that utilisation alone won't reveal. Maintenance costs can also make a well-used vehicle unprofitable.

Electric buses

For an operator paid under contract by a transport authority or another large buyer, payment delays deserve close attention. I'd ask for invoice-to-payment times by customer, alongside the amounts still overdue. An average based only on settled invoices can look reassuring while unpaid bills accumulate.

The contract matters as much as the payment history. How do tariffs adjust when costs rise? What deductions apply when buses are unavailable? An operator can run a reliable service and still struggle to meet debt payments if its main customer pays late.

Manufacturers and assemblers

Here, growth can tie up cash in imported components, unfinished vehicles and customer credit. Inventory days plus receivable days minus payable days show the cash conversion cycle. To estimate the funding requirement, you also need purchase costs and expected sales volumes.

Currency exposure needs its own check. Where components are bought in dollars and vehicles sold in local currency, a devaluation can squeeze margins before selling prices catch up. Ask how quickly prices can change and whether suppliers offer any protection.

Two tests apply to all five

First, does the asset's useful life support the repayment schedule? Consider a 48-month loan funding a battery expected to need replacement after 36 months. Who funds that replacement? The answer needs to be in the financing plan. Assess useful life from operating data and measured battery health, with accounting depreciation as a cross-check.

Second, what could the lender recover in a forced sale? Where secondary markets are thin, book value offers little comfort. I'd want an estimate that names likely buyers and allows for recovery costs, a sale discount and the time needed to sell.

Before opening a 40-tab model, ask for one monthly series that fits the borrower: cohort arrears, battery utilisation, paid rental days, invoice payment delays or the cash conversion cycle. It won't answer every credit question. How quickly the borrower produces it, and whether it reconciles to the accounts, will tell you something useful.