Keywords

1 Introduction

Ghana has posted robust pre-pandemic economic growth over the past two decades. GDP per capita grew by an overage of 3% over the period. With poverty alleviation programs initiated and continued by successive governments, poverty rates have halved between 1998 and 2016 [1]. The economic performance is further supported by the discovery of oil in the Ghanaian sector of the gulf of Guinea which elevated the country to middle income status [2]. Figures from the Ghana Statistical Service indicate a post-independence population growth of 6.7million in 1960 to 30.8 million in 2022 [3]. However increasing population and economic growth have a direct correlation to increased mobility needs as noted by Ayetor et al. [4]. Out of the 72 million vehicles in use in Africa, Ghana accounts for 2.5 million [4]. Mobility needs in Ghana until now has been fossil-fuel based with limited research and implementation of sustainable mobility options. This paper seeks to assess the profitability of a business model based on Light Electric Vehicles (LEVs) in a shared environment based on the campus of the Kwame Nkrumah University of Science and Technology (KNUST). It also assesses a business model based on a converted Internal Combustion Engine (ICE) motorbike for the city of Sunyani where a minimum viable product was developed with the University of Energy and Natural Resources and the local startup Solar Taxi. A cursory analysis of the technical requirements for the conversion of a converted ICE motorbike is also provided whiles respecting the proprietary information of Solar Taxi, the private partner involved in the research. The objective of such a sustainable mobility solution would be to provide transportation access whilst minimizing resource consumption and traffic congestion utilizing a sharing system for LEVs. Questions to be answered by this paper are elaborated as follows:

  1. I.

    Can business models on a university campus based on shared light electric vehicles be operated economically?

  2. II.

    What are the technical requirements for the conversion of an ICE motorbike to an electrically powered model?

  3. III.

    Can a business model based on converted ICE motorbike be operated economically?

2 An Overview of Sustainable Business Models, LEV Sharing Systems and the Conversion of ICE Motorbikes to e-motorbikes

The sustainable business model draws on the tenets of the traditional business model. The business model concept gained prominence in the early days of the internet, the so-called dot.com era [5]. On a general level it is a statement [5], a description [6], a representation [7], a conceptual tool or model [8], a structural template [5, 9], and a framework [9], to name a few. It is assumed that innovations on a business model level tend to yield higher returns when compared to product or process innovations [9]. The Business Model Canvas presents a framework for visualizing and structuring business models on an organizational level or on a unit basis [9]. For organizational decision-making and academic research in the context of emerging industrial phenomena, like Industry 4.0 or Re-Distributed Manufacturing [9, 10], the business model concept allows firms to elaborate the potential customer and value chain benefits and compare or generate the required configuration and implementation of the other business model elements or units [9, 11].

The canvas is geared toward economic benefit only, hence to transition to a sustainable model, amendments would be required. The definitions in various literature see sustainable business models as a modification of the conventional business model concept, with certain characteristics and goals added to it; and, they either 1) incorporate concepts, principles, or goals that aim at sustainability; or 2) integrate sustainability into their value proposition, value creation and delivery activities [9]. Geissdoefer et al. concretely define the sustainable business model as a business model that incorporates pro-active multi-stakeholder management, the creation of monetary and non-monetary value for a broad range of stakeholders and hold a long-term perspective [9, 11].

The use of light electric vehicles (LEVs) is slowly gaining prominence with efforts made to introduce such devices in Ghana in various international development programs [12]. In general terms, between 17% and 49% of trips made and 6% to 30% of the distance covered by private trips can be substituted by LEVs [13]. A study by Schelte et al. found that e-moped sharing resulted emissions of 20–58 g CO2-eq./pkm which is comparable to emissions from electric buses (27–52 g CO2-eq./pkm) [14]. As 81% of trips can be can be substituted by the use of e-mopeds, this statistic is significant [14] in reducing Ghana´s GHG emissions. Sustainable mobility is aided by the sharing of LEVs in a closed system [15]. About 8% of households reported surveys by the Ghana ministry of roads and transport that owning between one and four motorbikes which were in good condition for private use [16]. In total there was a stock of approximately 2.4 million conventional motor bikes in year 2012 [16]. With a current estimated population of 30,8 million people [3] and an assumption of a constant share of conventional motorbikes per person there could be a stock of 2.86 million conventional motorbikes in 2022. With such an estimation, current potential demand for e-motor bikes is 2.8 million e-motor bikes, as this is the calculated and estimated current number of conventional motor bikes in Ghana. A research gap exists on the viability of a sustainable business model based on e-mopeds, the business potential for converted ICE motorbikes and the environmental impact of such a substitution of conventional ICE motorbikes.

3 Methodology

3.1 Profitability of a Shared LEVs on a Campus

The possibility of an e-moped sharing system at the KNUST University in Kumasi is imagined as an example that can be scaled up to similar institutions in Ghana. Assumptions have been estimated based on one-on-one interviews and email correspondence with experts in the field of EV sharing systems (Russ P., Tier Mobility GmbH, 2021), findings after reviews of the Ghanaian tax and business registration systems (Aryee M.A., MEK Consult and HR Essentials LLC, 2021), and the business model of the private e-mobility service provider, Solar Taxi Ghana. Details of correspondence is included in the appendix. Detailed cost considerations can be found in the appendix giving greater context to the profitability analysis. An average drive on campus from takes eight minutes based on existing campus shuttle service, speed limits and a survey of students and staff on the KNUST campus to understand transport needs and dynamics [17]. 10 cents per minute was set as the fee per ride based on current costs on the campus. A business model canvas for the operation is provided below (Table 1):

Fig. 1.
figure 1

Business Model Canvas for campus sharing system based on the work of Osterwalder & Pigneur [11, 18]

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Table 1. Assumptions for shared LEV business model on a university campus.
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3.2 Conversion and Profitability Analysis of an ICE Motorbike

Technical feasibility of conversion of an ICE motorbike is proven by the creation of a minimum viable product (MVP) of a converted motorbike. Due to protection of proprietary information and protection of trade secrets of the private firm Solar Taxi, a basic overview of the conversion process and its key components are provided. The components of electric motorbike that require modifications include the original frame, swingarm, brushless DC motor, electronic speed controller (ESC), lithium-ion battery pack, power transmission, DC–DC converter. Parts that were replaced are; the engine, starter battery, throttle, clutch lever and dashboard. These parts were replaced with: 5kW chain driven motor, 50Ah Li-ion battery pack, motor controller, hall sensor throttle, and an electronic dashboard. Mechanical fabrication involved creating a platform to seat the electric motor, creating a housing for the battery pack a platform to mount the motor controller. The former location for the engine now contains the electric motor and the battery pack. The former location for the battery that powers the starter now houses the motor controller which translates actions such as turning the throttle into forward or backward movement. The battery used in the conversion is the HYSJ 21700E. This cell has a 3.7V nominal voltage and capacity of 17.76 Wh. It has a nominal capacity of 4800 mAh, has a maximum charge current of 3A and a maximum discharge current of 15A continuous and 25A short term. Determination of the potential pricing model for the converted motorbike was done by analyzing the cost implications of commercial production and market entry scenarios. Both analysis is based on information and interviews with the private sector firm Solar Taxi. There are two different business models when it comes to conventional motorcycle conversion. In the first scenario, the company buys conventional used motorcycles, converts them into e-motorcycles and sells them to customers who do not yet own a motorbike. In second scenario, the customer brings his own conventional motorbike to the company and the company converts it into an e-motorbike. Costs are presented in the excel appendix and used for the profitability analysis (Fig. 1, 2 and 3).

Fig. 2.
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a. Conventional motorbike stripped internal combustion engine (top right, Model: Haojin 125–32, 150cc). b. Rewired conventional motorbike linked to a battery pack (top left). c. Fully converted ICE motorbike at the campus of UENR (Left)(original model was Haojin 125–32, 150cc). d. E-mopeds and stand-alone solar charging stations on the campus of KNUST (Right).

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4 Results and Discussions

Figure 4 shows the plotting of revenue vs known costs and shows an approximate break-even point after 2.300 days and thus 6.3 years. Since the exact costs for the software development are currently unknown, it can be assumed that the calculation will shift, and that profitability will occur sooner. An overview of costs and assumptions used in the analysis is elaborated below (Table 1 and 2).

Table 2. Costs and revenue overview per e-moped.
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Fig. 3.
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Days until one e-moped is economical.

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The cost of a converted motorbike in scenario 2 is less than a brand-new converted electric motorbike as defined in scenario 1 and the product might be more suitable for the local environment. In addition, the converted motorbike also has ecological advantage in that it is in fact a reuse case. An assessment of the price of the converted motorcycle from scenario one, the sales price is even higher and exceeds the price of a new electrically powered-motorbike. Graphs of operating costs of converted bikes vs ICE motorbikes for both scenarios 1 and 2 are generated to demonstrate the profitability of the converted motorbike as there is insufficient data for a full business case analysis. It can be observed the rising costs of ICE motorbikes in both instances compared to a steady slow rise in cost for the converted motorbike with break-even achieved after about 32.500 km of operation in scenario 1 and 22.500 km in scenario 2. It is assumed that the converted motorbikes will be powered by solar charging stations whose cost is counted once as part of equipment costs hence no further costs are incurred for electricity supply. Solar charging stations used in the analysis are designed to power two e-mopeds at a time (Table 3, 4 and Fig. 5).

Table 3. Costs and sales overview of converted motorbike vs ICE motorbike.
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Table 4. Costs considered for operational costs of converted motorbike vs ICE motorbike.
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Fig. 4.
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Kilometers until the converted motorcycle is economical (scenario 1)

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Fig. 5.
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Kilometers until which the converted motorcycle is economical (scenario 2)

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5 Conclusions

Comparing the elaborated business models of LEVs on KNUST campus and the models for converted motorbikes with literature shows that these models do fall under the structures defined by Zott et al. [5] in that they are sustainable in terms of emissions reduction and innovative being adapted to the local environment and pricing constraints. They are also well within the definitions of Geissdöfer et al. [9], sitting between sustainable business models and circular business models due to the replacement of used ICE motorbikes with converted e-mopeds. The results elaborated proves from the pilot of shared devices on campus of the Kwame Nkrumah University of Science and Technology and as well the development of the prototype converted motorbike that these business models are indeed feasible despite long periods to profitability. Consumers in Ghana usually use mobility devices for a long period of time opting for repair and maintenance as opposed to newer models. Proving the economic viability of one e-moped is necessary to extrapolate that the business model as a whole would be profitable. In both scenarios of a business model based on a converted motorbike, it was observed that lower operating costs made these models cheaper over the lifetime compared to ICE motorbikes and present a valid business case. The sales prices indicated are based on pilot projects and prototypes and hence are on the higher-end of cost pricing. These costs should reduce further with higher production rates dues the principles of economies of scale. This represents a limitation of the paper as well as these benefits are not explored to reduce sales costs. Further analysis in operating costs are needed to provide a deeper insight into lifetime costs and end-of-life costs for the converted motorbike. Finally, whiles this paper lays out the technical feasibility of conversion, a performance review of the minimum viable product is needed to compare with e-mopeds and ICE motorbikes. Emissions reduction potential are well documented in literature internationally, however further research on the specific emissions reduction for these business models need to be investigated by means of a life-cycle assessment taking into account the local Ghanaian environment.