In Nairobi, motorcycle taxi (boda boda) rider Joseph Mwangi is one of thousands transitioning to electric two-wheelers. To power his daily routes, Joseph relies on a local battery-swapping network. It is an innovative subscription model that costs Joseph a daily rate of 180 Kenyan Shillings (KES). The average informal worker in Nairobi earns about 900 KES a day. He pays his battery swap fee daily. Once his current lease ends, Joseph plans to upgrade to a dual-battery model to extend his range and carry heavier loads.
For many riders in peri-urban areas, the lack of reliable charging infrastructure remains a significant bottleneck. The United Nations Environment Programme (UNEP) estimates that if Kenya’s urban centers had a fully integrated smart grid, the transition could reduce urban air pollution by up to 40% over the next decade.
Kenya, with a population of 55 million, has an energetic and rapidly urbanising population. Urban household incomes in the country have increased by 12.5% over the last four years. The electric two-wheeler sector has expanded by 35% over the same four-year period. Today, it is estimated that 15% of all commercial delivery trips in Nairobi are completed using electric vehicles, up from less than 1% in 2018. The growing demand for clean and cost-effective transport in Kenya is clear.
Refer to the third paragraph of the stimulus material ('Kenya, with a population of 55 million...').
Calculate the income elasticity of demand (YED) for the electric two-wheeler sector in Kenya over the last four years.
