This Flatpack Electric Van Is The Uber For Potatoes! | Fully Charged Show Podcast with OX Delivers

September 30, 202400:35:12

In this episode of the Fully Charged Show Podcast, Imogen is joined by Simon Davis, CEO and Co-founder of OX Delivers. This UK-based electric vehicle company is creating flat-pack electric trucks specifically designed for East Africa. Beyond building...

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[00:05]
Robert Llewellyn
Hello and welcome to another episode of the Fully Charged show podcast, where if you are watching this rather than listening, you will notice that we're in a rather special location. We're in an electric vehicle workshop in Warwickshire. And no, we are not at Jaguar Land Rover, we are not at Aston Martin. We are in fact, with a very, very special company called OX Delivers, who make incredible flat, packaging, super durable electric vans which they build and operate in Rwanda. And we're here to find out exactly how they create these incredible vans and operate a service which has been referred to as Uber for Potatoes. So, very shortly, I'm going to be sitting down with CEO and co founder Simon Davis to find out all about OX Delivers. But before we get there, a very, very quick advert break. Love everything Electric. Join us live in the south this October and in Australia, London and Canada in 2025. Simon, thank you so much for inviting us here to your wonderful facility here in Warwickshire. We have so much to cover, but I wonder if you could kick us off by just painting a picture for us. Who is OX Delivers and what are you trying to do?
[01:14]
Simon Davis
So we're all about supercharging trade in Africa. And we're here in Warwickshire because we're designing this, the first purpose designed electric truck for the dirt road. Moving goods on dirt roads. And you might say, what's the connection between those two? Well, here, you know, outside there, there's a field of potatoes, and when the farmer's harvest his potatoes, he picks up a phone and a whole logistics chain swings into action. And before you know it, the potatoes are in your shopping trolley and you're taking them home. It's not like that everywhere. If you're a farmer in East Africa, you're picking those potatoes, you're putting them in plastic sacks, 150 kilos at a time. You're then loading them on top of your bicycle. It's like putting two of your mates on the back of your bike and then pushing them to the local town. And that is slow, it's expensive, it's dangerous. And at OX Delivers, we're about making that trade affordable, reliable and clean.
[02:10]
Robert Llewellyn
So there's quite a few components of the business model that I want to go on to, because I've seen in a few articles that you're described as the Uber for potatoes. And that is something that I want to explore in a lot more detail. But before I do, I mean, I know that you currently have trucks operating in Rwanda, a market where typically they would import trucks and vans and cars, maybe at the kind of towards the end of their life. And as such, you know, they're not particularly fit for purpose, not least because the road conditions in Rwanda are not necessarily fabulous. So I wonder if you could describe for us why the existing vehicles currently used are not fit for purpose and how this may differ.
[02:49]
Simon Davis
Yeah, so, yeah, you're right. In Africa, upwards of 90% of vehicles are imported, used, sometimes very used. Like in Nigeria, a quarter of all vehicles imported are 19 years old at the point of import.
[03:02]
Robert Llewellyn
19 years old?
[03:03]
Simon Davis
Yes. Wow. It's extraordinary. And then they have. So none of them were ever designed for the conditions on the continent, where in Rwanda, for example, only 10% of roads are paved. So the trucks are then spending most of their lives on dirt roads, which are dusty and bumpy in the dry season, they're rivers of mud in the rainy season, and so they get trashed, essentially.
[03:30]
Robert Llewellyn
My sister and brother in law have finally admitted defeat on their 19 year old SIA Alhambra. And I have concerns about them driving to, I don't know, to my house, let alone if they're operating on sort of unpaved roads. So you've had to design this and you've had to make it so much more fit for purpose. Now, going through your website and doing a little bit of research, the original vehicle, I believe, was designed by Gordon Murray, who is perhaps best known for designing the McLaren F1. Quite far removed from something like this that is a little bit more utilitarian. However, I also understand that there were several things that he designed that you had to kind of unpick to make this even more fit for purpose. Can you take us through that?
[04:14]
Simon Davis
Yeah. So Gordon was involved back in the start of the project and he does say it's one of the most important projects that he's ever worked on. And the focus from the very beginning was about building a simple and effective vehicle for running on these kind of roads. Nobody's designed a vehicle for use on dirt roads since, say, the Land Cruiser 70, which was launched in the early 80s. But part of the challenge of building a successful business is not just the product, it's also the business model. So what we've been doing since OX Delivers started three years ago is that we've been developing a business model that enables us to get that product into the hands of the people who really need it.
[04:59]
Robert Llewellyn
Okay, I think it's time for us to talk about this business model because this is where I think things get really, really fascinating. So some of the things I've read is that You've said that for electric vehicles, the sales model doesn't necessarily work. Not least because that means that vehicles have to be pretty expensive and not least because you're also having to have some planned redundancy such that those vehicles have a set operating time. And eventually at the end of operating time, you'll buy a new vehicle. And in economies like Rwanda, that simply does not stack up, but an operating model does. What does that mean?
[05:37]
Simon Davis
Well, I think we have to first of all recognize how the car trade works in the uk, right? If I want to go and buy a new car, I'm actually going to buy it on finance. It's not going to be me that buys it, it's the bank. And you go to Africa, less than half of people have a bank account, let alone the ability to raise finance. So access to capital is a massive issue. The reason all these vehicles are imported used is because people don't have the capital to buy new vehicles. But then you also have to sort of question how the business model works here. My mates built a camper van on a conversion of an ex delivery van, but it was a delivery van that was defleeted at only four years old, which is crazy, right? So Mercedes are building a Mercedes Sprinter and then expecting their first customers to come back and buy another one after four years. Like 40 years ago, Mercedes used to build vehicles that lasted for 30, 40 years. Now the model has changed and so if you switch to a service based model, it completely changes the incentives for us. So we don't ever want to take these vehicles off the road, right? We want them to last 20, 30 years. And when they do get to the end of their site, their life, we want to harvest the parts that are left and put them back onto new vehicles. And actually EVs make a lot of sense because the reason you scrap most cars is because there's a problem with the engine, right? And EVs, we know how long Tesla batteries are lasting. You don't have very much maintenance to do. So there's a huge opportunity to really change the business model and instead of building for redundancy, actually building for service, building for a long operating life.
[07:12]
Robert Llewellyn
So building for service. So let me just check if I've got this right, because this is going to be the Uber for potatoes bit of this. So instead of someone just bringing you up, buying a vehicle, owning it, using it till it's destructed, and then buying a new one, you're actually doing this much more as kind of vehicle, as a service model. So If I was a farmer in Rwanda, how does that work? How do I interact with ox delivers?
[07:34]
Simon Davis
Yeah. So I'll give you an example of a chili pepper farmer called Jean Pierre. And his route to market used to be chilli peppers onto a bicycle and push them to the nearest town, then put them on the roof of a bus, which takes him across Rwanda. Then when he arrives at the bus station in Kigali, he would then get a moto taxi, put them on the back of a motorbike, and take them to the export point and sell chilli peppers. What he does now is he rings up ox delivers and books a space on the back of a truck. We come and collect his goods, we deliver them straight to the delivery point, and instead of having a two day round trip, he's doing it in three or four hours. And obviously that means it's so much more productive. He can spend much more time on his farm and much less time traveling. So he's gone from doing, you know, he used to do one trip a fortnight with 3 or 400 kilos. But can you imagine taking 3 or 400 kilos of chili peppers on a bus? He now sends two trucks a week. So he's more than 10x'd his business because he can get goods to market.
[08:37]
Robert Llewellyn
That is absolutely unbelievable. And okay, this might be a stupid question, but presumably he was traveling with the chili peppers before. He's now sending them, and then they're dealt with at the other end. Or is he also on the truck as well?
[08:51]
Simon Davis
So, no, we deal with it for him most of the time. Because the reason people travel with their goods is because the trade isn't reliable. Like here. No farmer would travel with their goods taken to market. We know the system's work. And this is why our overall vision is all about supercharging trade. Because we're going from a situation where people are having to physically carry their goods and go with them to make sure they get paid and all that. At ox, we handle that transaction for them.
[09:17]
Robert Llewellyn
My gosh. Okay. I have so many other questions. This is like opening up Pandora's box. Which direction are we going to go in? So from your sense then, you own the vehicles and then your sort of business model is that you basically lease out space in a truck?
[09:33]
Simon Davis
Yep.
[09:34]
Robert Llewellyn
Okay, so. And does that mean that, you know, anyone can book a slot and they might not have to take up the whole space, but they might be sharing the space with various other farmers as well?
[09:42]
Simon Davis
Yeah, absolutely. This is a key part of the business model because you know, to fill a whole truck worth of goods is a lot of. Requires a lot of stuff. Right. Farms in Africa typically are much smaller scale than we're used to here. It hasn't been the consolidation. So we can enable someone to use transport when their other option would be a bicycle. But it also applies all the way through to big corporates. So we serve, you know, a big fish farm in Rwanda. And their real challenge is they have limited amounts of capital, they're venture backed, but they really want to be spending their investment on fish farming equipment, cages, freezers, fish processing facilities. They don't want to be spending all that capital on vehicles. And they don't have the third party logistics providers that we would have. They can't just ring up Eddie Stobart. There aren't businesses like that in the market.
[10:33]
Robert Llewellyn
And so. Okay, I'm going to check my notes here because one of the things that I've read in my research is that currently, for example, the price of bananas, they cost 10 times more in the city than they do in the villages. And that's because that logistics cost is currently so expensive. And obviously farmers need to recoup that cost. So are you seeing anecdotally that actually are farmers making bigger margins or are the prices coming down in cities?
[10:59]
Simon Davis
Well, you're right, you get these huge price deltas because essentially if you're a farmer, particularly if you have a good year, the people around you also have a good year. So prices actually fall. But you know, in the cities, if you, if you can't reach the tomatoes, you know they're worthless to you. The value is always created in the movement. And if I give you an example of one of our clients is a lady called Beatrice, who's a wholesaler of tomatoes. So she was buying tomatoes from farmers. They would bring them down from the hills to a local market, she would buy them there. And then she's got three options. She can walk with them, put them on the head, put them on a bicycle, or wait for a bus. And she used the bus. But waiting for a bus can be a multi day affair. Right. And all the time you're sitting by the side of the road, you'll sleep there. So nobody steals your tomatoes. And obviously the value of your tomatoes is going down because they're sat in the sunshine. And she had. And so since working with Ox, she's gone from trading about $70 a day in tomatoes to $700 a day.
[11:58]
Robert Llewellyn
Wow.
[11:59]
Simon Davis
And that's enabled her to buy a piece of land for a couple of thousand dollars. And she actually, the best bit is she wants to build a house. And she told me last time I was in Rwanda that she was going to call it the Ox House because we've made it possible for her to do that.
[12:12]
Robert Llewellyn
So the potential impact, I mean, is absolutely huge. What's the scale of your operation currently?
[12:18]
Simon Davis
So to date we've served about 5,000 customers, which has really enabled us to prove this model works. Right. That was the big question is, can people afford to pay for transport? That's why other car businesses don't go to Africa. They perceive there's no market there, but we've proven we've generated significant revenues from real paying customers. But that's a tiny fraction of the market. Rwanda is 13 million people alone, East Africa 300 million. And it's a market that's growing enormously. Africa will be the most populous continent very soon and is doubling in population over the next 20 years.
[12:57]
Robert Llewellyn
Talk to me about the process of actually booking a slot in the truck, because I've read that 80% of Wurundenese don't have access to a smartphone. And that huge kind of digital accessibility must be a component that you have to consider in all of this as well.
[13:12]
Simon Davis
Yeah, there's smartphone penetration is lower. I think it's probably more than 80% have access. You know, 2G phone penetration is very high. Almost all business people will have a 2G phone. And so right now we have a short dial number. So you dial a four digit number in Rwanda to book a ride. We also have plans for what's called a USSD app. So you might remember from back in the day when you had a pay as you go phone, you could put a code in, it would tell you what your credit was. Now we don't really use it in the uk, but that's heavily used for things like mobile money in Africa. And so it's kind of like having an SMS conversation with a machine. And so we can build an app that enables people to book a ride much more simply than you would open the phone. Obviously, we're talking here about logistics. Right. People's farms don't move, for example, so people can have a couple of saved locations of where they're delivering from and to, and you can do most of the transactions you'd need to do just by a 2G phone.
[14:16]
Robert Llewellyn
So you have operations here in Warwickshire. The engineering team is based here in Warwickshire. Are you shipping these vehicles straight to Rwanda like this? And the reason I ask is because they look to me pretty flat Pack assembly proofed. How do you ship them?
[14:33]
Simon Davis
Yeah, so today we're shipping fully built vehicles. But the plan absolutely is to get to Flatpak. That was one of the core innovations back from the original start of the project, was recognizing building vehicles is complex. Right. You know, there is outside of South Africa and the very northern countries in Africa, there is next to no manufacturing and very, very little of vehicles. VW have a plant in Rwanda, but it's putting steering wheels on and fitting side windows. So what Flatpak enables us to do is ship efficiently. We can get six of these in a container and then we put them together in market. So we can take Rwanda on the journey of from building kits to fully built vehicles over a period of time and build up those local skills and capability.
[15:20]
Robert Llewellyn
So I just want to pause on the fact, six of these in one shipping container, that is an extremely efficient way to ship a vehicle.
[15:28]
Simon Davis
Yeah, and this is one of the things about approaching the business model of the automotive industry afresh. You know, most, lots of companies do ckd, knock down build, but almost always they build the vehicle and then take it apart and then ship it. Whereas what we've done is thought about the value chain from the scratch. And so by flat packing then we can reduce our shipping costs, we can drive more local content and obviously that then helps when we come into maintenance and things like that, because we've got the skills in country.
[15:55]
Robert Llewellyn
So I need to ask you about charging infrastructure because Rwanda is a really interesting country in that it's got the grid is already 60% powered by renewables, but only 75% of people are currently connected to the grid. So they've got an interesting challenge in that they're rapidly decarbonizing but also having to rapidly expand their grid at the same time. I imagine that presents various challenges from a charging infrastructure perspective.
[16:20]
Simon Davis
Yeah, so yeah, Rwanda has a very green grid. Actually, Kenya is even greener. It's 90 plus percent green because there's so much hydro, geothermal, obviously solar opportunity. And so there's a lot of investment going into clean energy. And one of the things about Africa is their level of growth means they're building lots of things from scratch. So they're not dealing with old infrastructure. Like, you know, they've never built a landline infrastructure. They went straight to mobile phones. And that's a real opportunity with vehicles as well. You know, going straight to EVs, skipping out diesel vehicle ownership. The good thing about what we're doing is obviously we're commercial logistics. So our routes are planned and they're known and they're stable. And therefore charging can be done at base. We don't need charges spread all over the country. And so our trucks are charged basically each night at home and we position those bases on the major grid lines. And you talk about like the electrification levels and that's household electrification. And one of the key challenges there is if you connect a household, you might spend a dollar or two a month on energy. And that doesn't make any economic sense. What's great about electric vehicles is you put $20 of electricity into this and you'll make $200 in revenue. So the economics of it, superb. So actually EVs are a great way to drive electrification because you're building the economy and driving productivity. And obviously as you do that, then people can afford to electrify their homes as well. You've got to start with the most productive use of energy. And actually a fridge is not a particularly productive use. Right. It's convenience, not value add.
[17:56]
Robert Llewellyn
And there's a number of interesting EV incentives within Rwanda, from what I understand. Talk to us about this.
[18:01]
Simon Davis
Yeah, because it's really in the interest of the government to go ev like Africa biggest import is oil and it's sending dollars out the country to buy oil. And so going EV replaces that with a locally generated source, creates value in the country. So for example, as an EV operator, we get access to the industrial level tariff from day one. So your charger isn't charged at domestic rates, it's charged at industrial rates. There are reduced import duties for EVs because they can see the real advantages to the economy.
[18:36]
Robert Llewellyn
It's really evident to me that we're kind of on a precipice of seeing a huge step change within the economy and within sort of the appetite for new technologies, electrification, et cetera, et cetera within East African countries. And actually I read recently that BYD has just announced that it will partner with Rwanda based electric motorbike company ampersand to build 40,000 bikes in Rwanda and Kenya. So clearly things are going to change pretty substantially. What would you anticipate happening over the next kind of five to 10 years?
[19:07]
Simon Davis
That's a tough question. There's just so much opportunity. One thing, the growth over the next five to 10 years, the workforce will have increased by 75%, I think, in that sort of timeframe. And there is no reason why, you know, EVs can't dominate the landscape if we get the right business models. Right. The classic expecting consumers to buy them is not going to happen, but with models like this and also Ampersand, who are doing. They're doing electric motorbikes. Motorbikes are the dominant taxi in East Africa. And it's cheaper to operate an electric motorbike than it is to run a petrol one. So it just makes sense. Same as here, you know, it's cheaper for us to run EVs with our business model than it is to run diesels. And so it can be the dominant opportunity.
[19:53]
Robert Llewellyn
So I know that your background is in traditional automotive engineering. Like many people, your background was at Jaguar Land Rover. I've made this joke many times, this podcast, but all roads stem from Leamington Spa. Certainly seems that way, but. So I want to know a little bit more about the engineering that's gone into this vehicle, because unlike a Range Rover or a Jaguar, you've had a vastly different engineering challenge here. You've had to create something that you know can be hugely durable, that it can last a long time, and then it makes sense from an operating point of view. What were some of the things that you put on that kind of initial design criteria?
[20:32]
Simon Davis
Yeah, so obviously the roads are the biggest difference. You know, most products are designed even off road. Products are designed for 90 plus percent tarmac and a little bit of dirt. We see from our data that our trucks are spending half their time on dirt roads in the current operations. In the summer, in the dry season, they're dusty and they're bumpy. In the rainy season, they're rivers of mud. So resilience is really important, durability is really important. But overall, the most important thing is total cost of ownership. This is a huge market, but it's an extremely price sensitive market. And so we have to deliver a total cost of ownership that's a tenth of the local alternative. And actually that's a really refreshing approach. Our whole model with the circularity really changes how you think about it, because we're prepared to invest money in the vehicle in order to deliver lower running costs. And my journey at Jaguar Lander started as chassis engineer, worked in strategy for a long time, and then ended up in building software. And we've taken a lot of lessons from the way the software industry build vehicles, because, you know, thinking about, for example, data and monitoring vehicles in use, consistently updating vehicles, and so that we can really drive that low cost of ownership. It's not about trim levels or model years, it's about how do you move stuff cheaply on dirt roads.
[21:59]
Robert Llewellyn
I also just want to pause on a tenth of the operating Cost of the local alternative.
[22:03]
Simon Davis
Yeah.
[22:04]
Robert Llewellyn
That is phenomenal.
[22:06]
Simon Davis
Yeah. And the reason is the local alternative is insanely expensive. So I've talked about the conditions already. Right. When we started three years ago, one of the first things we did is we wanted to test the market. Can people afford to pay? How does all this work? And so we went to Rwanda and we rented a truck that in itself was expensive. We were paying $1,000 a month to rent a fairly well used pickup because there's just a shortage of vehicles. And then we ran it, delivering goods for our customers. And what we found was we spent as much money on fuel as we did on maintenance. So can you imagine going to the garage and every time you put 80 quid in the tank, you're also getting an 80 quid repair bill. And it's a function of the fact the vehicles weren't designed for the conditions. You're running fully laden on dirt roads. And so to run a pickup in Rwanda costs you five times more than it does here. So. And we all know EVs are cheaper than, cheaper than diesels. Right. To run because of the energy costs and the maintenance costs. So, you know, it's 10 times cheaper than the local alternative. Basically means it's half the price of running a Hilux in the uk.
[23:14]
Robert Llewellyn
Wow. Wow. And I think that sort of emphasizes the point that actually there's a huge transportation equity piece here.
[23:21]
Simon Davis
Yes.
[23:21]
Robert Llewellyn
And how we need to consider just this isn't just about powertrains and having clean electric vehicles. This is around allowing people access to transportation, which, as we know, gives them access to business, social opportunities, voting, health care, all those good things. And it's so vital that it is affordable within specific markets. Sorry.
[23:44]
Simon Davis
We're so used to having easily available transport here, we just don't even think about it. But ultimately, this country was built on the back of a massive navy. We want to send something somewhere. You pick up the phone, you go on the Internet, it just happens, happens. We're so used to it. But actually, as soon as you don't have it, so many things, you know, Amazon doesn't exist in Africa because they can't deliver. A few people have tried to copy them. It doesn't work. You know, so many opportunities, you know, some you can have a diamond ring, but if I can't get it to you, it is worthless to you. And we don't think about that problem. But it's a huge problem for about 3 billion people on the planet.
[24:22]
Robert Llewellyn
Wow. And it's so interesting that you actually started with Understanding how the operations work before you went away and designed a vehicle was that. I mean, talk to me how you became involved in this project in the first place.
[24:36]
Simon Davis
So I worked at JLR for many years. I heard about the project. I think I read originally about it in autocar. My wife stuffed it under my nose and so I got a little bit involved, met a few of the people, pitched it into Land Rover a couple of times. But ultimately it's such a different approach that you can't get your head around it when you're sat in a big automotive. So I left Jaguar Landrover as part of the redundancies in 2019 and was kind of wondering about what, you know, what to do. And so I volunteered to help. And they said, well, our only employee is leaving, he's part time and underemployed, so why don't you have a go? And so kind of, you know, I started looking around. My co founder Natalie, joined. After six months, we started doing more research. We applied for some grants and then ultimately won some funding from Innovate UK and the Advanced Propulsion Centre. And that enabled us to hire. And we got. I drove the prototype we had to my first investor's house and parked it on his drive and we got our first investment and that hired the first team of nine and we've just grown from there and we're at 127 people now.
[25:45]
Robert Llewellyn
127, yeah.
[25:46]
Simon Davis
So two thirds of the team were in Rwanda, physically delivering stuff. And then we've got a team here in the uk. Well, most of the engineering stand in the uk. We've got some engineers in Kenya and then a few people around the world who do the business stuff.
[26:00]
Robert Llewellyn
Oh, my goodness. I mean, that's quite a phenomenal ride in. That's quite an incredible pandemic that you had, to be honest.
[26:07]
Simon Davis
Yes, it was, yeah. I was working at home on my own before the pandemic made it trendy. And then, yeah, when we originally started, we used to meet in a church hall because we meet up once a week because that was kind of all you're allowed to do. And we were fully remote for the first couple of years.
[26:24]
Robert Llewellyn
So it must be really quite amazing to be able to see that you've got 4,000 customers. That's absolutely astonishing growth. But what happens from here?
[26:34]
Simon Davis
What happens from here? Grow, grow, grow. So we've got some big announcements coming over the next few weeks. This is a huge opportunity. You know, in fast forward a few years, we'll have hundreds of trucks running on the road serving tens of thousands of customers.
[26:51]
Robert Llewellyn
Do people always get it? Because I imagine you've had to have quite a few conversations where people like, oh, what are you up to, Simon? You're like, oh, well, I'm doing this thing called Ox Delivers. We're moving to a new, different kind of operating model where it's sort of a transport as a service rather than you have to buy a van. And I imagine some people, like, all right, do people get it?
[27:13]
Simon Davis
Those that get it absolutely love it. And some people are a bit confused by it. You know, it is, I think, what is critical. And if you look at all the successful startups, they change the business model and change the product. You know, both come together, whether it's Tesla with the dealer model or whether it's mobile phones, where you bundle the mobile phone with the contract. It does require a level of change and it's not a market many people are familiar with. But that doesn't mean it's any less of an opportunity. Right. It's, you know, the best opportunities are hidden in plain sight. And this is definitely one of those.
[27:44]
Robert Llewellyn
So slightly more existential question for you.
[27:46]
Simon Davis
Yeah.
[27:47]
Robert Llewellyn
Because, you know, whenever we do anything on particularly big SUVs on the channel.
[27:52]
Simon Davis
Yeah.
[27:53]
Robert Llewellyn
Invariably there'll be comments saying, oh, brilliant, more massive, oversized vehicles for people that don't need them. And we need smaller, cheaper, lighter electric vehicles. But we could also argue that actually we need fewer vehicles that last longer, that we have more of these kind of transport of the service models. Do you think there's a space for something like this in the UK and in European markets?
[28:16]
Simon Davis
I think transport as a service is definitely a revolution that's coming. None of the existing manufacturers have managed to really get it. They tried, but it's not worked. Because, you know, you're right, we build vehicles and they sit still most of the time. That doesn't make any sense. And obviously in the west, the big barrier is the cost of drivers. You know, we'd all be using Uber if we didn't have to pay drivers anything. But autonomy hasn't quite come. And the point it does come is going to be a transformational change. Right. Because why would I own an autonomous vehicle? I just go on my phone and press a button and it will be fine. In emerging markets, the late, the driver cost is significantly lower, so they can actually go there sooner to this shared model. And to my mind, we all know EVs are going to unlock a cost of ownership save versus diesels. In my view, this move to a as A service based model is at least a bigger change again because we should be building vehicles that last decades. We should be constantly refining and improving those vehicles and it will completely change how we think about products. You know, we wouldn't. You should look at how Spotify has changed music collection or Netflix has changed video ownership. Right. We wouldn't even dream of owning those things now. Like why do we own vehicles? Why? You know, and it's partly because we've spent the last hundred years persuading people that cars are an extension of our personality. They're not really, but it's a good way of getting people to put their hands in the pocket.
[29:49]
Robert Llewellyn
It's so interesting. You're absolutely right because, you know, I bet most people listening to this podcast at some stage have either still got a big box of DVDs stashed away in a loft somewhere or are like, God, why on earth did we did we buy these in the first place?
[30:05]
Simon Davis
We'd never go back. Right. And it's kind of one of the transition to as a service is the same. It's hardest in the markets where you've got the most embedded. The people who switched to Netflix last were the ones with the biggest DVD collection. The same is true of vehicles. We've got the biggest car collection in the west, so we will switch to as a service later. In Africa, they don't have a big car collection. So as a service just makes sense. Why would I buy one? I can just use this.
[30:34]
Robert Llewellyn
And I think from an innovation perspective, it's really interesting looking at some of the things going on in various African countries whereby they have, as you say, leapfrogged certain things. For example landlines and going straight to Internet enabled phones. In this instance, maybe leapfrogging private vehicle ownership to transport as a service models. So, okay, so I mean it has been no question an extremely successful five years since you've been in this business, but I imagine at points extremely stressful as well. What have been some of the really big meaty challenges along the way?
[31:10]
Simon Davis
The, you know, we're doing something here that's a bit different. Right. And as much as people who invest in innovation like to say they support innovation, they also like to invest in things that they can get their heads around that are normal. Right. Everybody wants to invest in AI at the moment. Guess why? Because AI is the trendy thing and this isn't the trendy thing. Right. And so that's been a real challenge really explaining to people about a situation that's outside of most of Their people's experience and mobilizing capital, I guess, has been our biggest challenge. There's lots of other engineering challenges and people challenges. Building a business that spans a couple of continents, getting the right people who can really kind of take a fresh approach. There's lots of engineers, but we're very used to as engineers, optimizing things to build big, expensive, shiny cars. Thinking about things, about how do we actually deliver vehicles that last a long time, that live in tough environments is a skill you have to learn.
[32:15]
Robert Llewellyn
So what kind of mindset do you try to cultivate within the engineers and workforce here?
[32:21]
Simon Davis
Well, I think we aim for a data driven situation. One of the big opportunities of as a service is that you continue to own the vehicle so you know what happens to them. You're not guessing from service records. You can actually monitor the vehicle. So making sure that we're pulling data and using that to drive decisions. We also have a big focus on teamwork here. I'm a passionate believer that teams is what delivers and making sure we share information with people. We can all make good decisions, but not if we don't have the data. So it comes back to data again, like making sure we're using data, sharing it properly to enable good decisions.
[32:59]
Robert Llewellyn
And if you could whisper something in your ear of your 2019 self, what would you say?
[33:05]
Simon Davis
Well, Elon Musk has a good quote about, you know, running businesses is like eating glass, and I think that's perhaps a bit harsh. There's some really big upsides to running a business and, you know, being able to start from scratch and really shape things in a way. I guess I'd probably say keep going, it might yet work because, you know, it's uncertainty. There is, there is. You have to build your own momentum and keep your own momentum. We've seen all the challenges that the other EV startups have faced over the last few years. You have to make your own success. And so continuing to focus on that is the key, I think.
[33:44]
Robert Llewellyn
Well, honestly, thank you so much for joining us on this podcast. Thank you so much for sharing with us all of the story behind this incredible vehicle. And personally, I think we should have a fully charged trip out to Rwanda.
[33:57]
Simon Davis
I think it'll be a lot of fun. It's a very beautiful country. And, yeah, you'd be able to see the impact on the ground of how it changes people's lives, you know, and that's the great thing about ox, right, is we've got some exciting engineering challenges. We're making a real difference to people. In terms of their ability to, you know, build successful businesses and access healthcare and education, all those other things. And it's good for the climate. Like it's a real win, win win business.
[34:28]
Robert Llewellyn
I personally really, really enjoyed that conversation with Simon and I think it is so amazing that companies like OX Delivers exist that aren't just looking at creating clean transportation, but transportation that is inclusive and can unlock huge economic opportunities. So if you enjoyed this episode or if you find OX Delivers interesting, please do share this episode and spread the word that they exist. Now if I could ask for one little favor before you go. If you could like comment, follow or subscribe, it would be so appreciated. It really helps to ensure that we can keep covering important and interesting topics in this clean energy transition. But that's it. That's all we have time for. If you have been, thank you for listening.

This Flatpack Electric Van Is The Uber For Potatoes! | Fully Charged Show Podcast with OX Delivers

September 30, 202400:35:12

Summary7 min read

Summary of "This Flatpack Electric Van Is The Uber For Potatoes! | Fully Charged Show Podcast with OX Delivers"

Release Date: September 30, 2024
Host: Robert Llewellyn
Guest: Simon Davis, CEO and Co-Founder of OX Delivers
Location: Electric Vehicle Workshop, Warwickshire

Introduction

In this engaging episode of The Fully Charged Podcast, host Robert Llewellyn visits the electric vehicle workshop in Warwickshire to explore the innovative work of OX Delivers. This pioneering company is revolutionizing logistics in Rwanda with their flat-pack electric vans, earning the moniker "Uber for Potatoes." Simon Davis, the CEO and co-founder of OX Delivers, joins Robert to discuss the mission, business model, and the transformative impact of their electric vans on African trade and sustainability.

OX Delivers: Mission and Vision

[00:04] Robert Llewellyn:
"Welcome... with a very, very special company called OX Delivers, who make incredible flat, packaging, super durable electric vans which they build and operate in Rwanda."

Simon Davis elaborates on OX Delivers' mission to "supercharge trade in Africa," focusing on designing electric trucks specifically built for dirt roads. He highlights the stark contrast between efficient logistics in places like Warwickshire and the challenging conditions faced by farmers in East Africa, where unreliable transport methods impede economic growth.

[01:14] Simon Davis:
"...making that trade affordable, reliable and clean."

The Existing Logistics Challenge in Rwanda

Robert points out the reliance on outdated, imported vehicles in Rwanda, which are ill-suited for the country's rugged road conditions. Simon confirms that over 90% of vehicles in Africa are used imports, often up to 19 years old, leading to high maintenance costs and inefficiency.

[02:48] Simon Davis:
"In Africa, upwards of 90% of vehicles are imported, used, sometimes very used. Like in Nigeria, a quarter of all vehicles imported are 19 years old at the point of import."

Innovative Vehicle Design

The conversation shifts to the design of OX Delivers' electric vans. Initially designed by Gordon Murray, known for the McLaren F1, these vans were re-engineered to meet the specific demands of African roads. Simon emphasizes the importance of creating a "simple and effective vehicle for running on these kind of roads."

[04:14] Simon Davis:
"Nobody's designed a vehicle for use on dirt roads since, say, the Land Cruiser 70, which was launched in the early 80s."

Revolutionizing the Business Model: Transport as a Service

A significant portion of the discussion centers on OX Delivers' unique business model, which diverges from traditional vehicle ownership. Instead of selling vans, OX Delivers leases space in their trucks, enabling farmers to transport goods affordably and efficiently.

[07:12] Robert Llewellyn:
"...you're actually doing this much more as kind of vehicle, as a service model."

Simon explains how this model transforms the logistics landscape for farmers like Jean Pierre, a chili pepper farmer, who can now transport his produce more rapidly and reliably, significantly increasing his productivity and income.

[07:34] Simon Davis:
"He’s gone from doing one trip a fortnight with 3 or 400 kilos. But can you imagine taking 3 or 400 kilos of chili peppers on a bus? He now sends two trucks a week. So he's more than 10x'd his business..."

Impact on Local Economies and Farmers

The episode highlights the profound economic impact OX Delivers has on local farmers. For instance, Beatrice, a tomato wholesaler, increased her daily trading volume from $70 to $700 by utilizing OX Delivers' services, empowering her to invest in land and personal infrastructure.

[10:58] Simon Davis:
"...since working with Ox, she's gone from trading about $70 a day in tomatoes to $700 a day...she was going to call it the Ox House because we've made it possible for her to do that."

Scalability and Market Potential

Simon reveals that OX Delivers has successfully served around 5,000 customers, proving the viability of their model. With Rwanda's population of 13 million and East Africa's 300 million, the market potential is immense, especially as Africa's population is expected to double in the next two decades.

[12:17] Simon Davis:
"Rwanda is 13 million people alone, East Africa 300 million. And it's a market that's growing enormously."

Technical Aspects and Flat-Pack Innovation

The engineering behind the flat-pack design is discussed, emphasizing its efficiency in shipping and local assembly. This approach not only reduces costs but also fosters local skills and maintenance capabilities.

[14:32] Simon Davis:
"One of the core innovations back from the original start of the project was recognizing building vehicles is complex... by flat packing then we can reduce our shipping costs, we can drive more local content..."

Charging Infrastructure and Renewable Energy Integration

Addressing concerns about Rwanda's charging infrastructure, Simon notes that Rwanda’s grid is predominantly powered by renewables and that OX Delivers' logistics model allows for efficient charging at centralized bases, aligned with the country's green energy initiatives.

[16:20] Simon Davis:
"Charging can be done at base. We don't need charges spread all over the country. And so our trucks are charged basically each night at home..."

Future Outlook and Expansion Plans

Looking ahead, Simon anticipates significant growth for OX Delivers, with plans to scale operations to hundreds of trucks and tens of thousands of customers. He envisions transport as a service becoming a dominant model, especially as autonomous vehicles emerge.

[26:34] Simon Davis:
"...we'll have hundreds of trucks running on the road serving tens of thousands of customers."

Challenges and Overcoming Barriers

Simon discusses the challenges OX Delivers has faced, including securing investment for a non-traditional business model and engineering hurdles in designing durable vehicles for harsh environments. He emphasizes the importance of a data-driven approach and teamwork in overcoming these obstacles.

[31:10] Simon Davis:
"...mobilizing capital, I guess, has been our biggest challenge."

Vision for Transport as a Service in Western Markets

Expanding beyond Africa, Simon believes that transport as a service has potential in Western markets, particularly as the cost of autonomy decreases. He advocates for a shift from vehicle ownership to service-based models, drawing parallels to how digital services have transformed media consumption.

[28:15] Simon Davis:
"...this move to a as A service based model is at least a bigger change again because we should be building vehicles that last decades."

Personal Insights and Company Growth

Reflecting on his journey, Simon shares personal insights and the rapid growth of OX Delivers from a small team to 127 employees. He underscores the fulfillment derived from making a tangible difference in people's lives and contributing to sustainability.

[25:46] Simon Davis:
"...we're at 127 people now."

Conclusion

Robert Llewellyn concludes the episode by expressing admiration for OX Delivers' innovative approach to sustainable and inclusive transportation. He highlights the company's role in unlocking economic opportunities and emphasizes the importance of affordable logistics in the clean energy transition.

[34:27] Robert Llewellyn:
"...companies like OX Delivers exist that aren't just looking at creating clean transportation, but transportation that is inclusive and can unlock huge economic opportunities."

Notable Quotes

Simon Davis on Business Model Innovation
[05:36]: "...we don't ever want to take these vehicles off the road, right? We want them to last 20, 30 years."
Impact on Farmers
[10:58]: "...she wants to build a house. And she told me last time I was in Rwanda that she was going to call it the Ox House because we've made it possible for her to do that."
Flat-Pack Efficiency
[15:20]: "...by flat packing then we can reduce our shipping costs, we can drive more local content and obviously that then helps when we come into maintenance and things like that."
Future of Transport as a Service
[29:49]: "...we would switch to as a service later. In Africa, they don't have a big car collection. So as a service just makes sense."

Key Takeaways

Innovative Business Model: OX Delivers utilizes a transport-as-a-service model, leasing space in electric vans to farmers, thereby making logistics affordable and efficient.
Customized Vehicle Design: The electric vans are purpose-built for Africa's challenging dirt roads, ensuring durability and low total cost of ownership.
Economic Empowerment: By improving logistics, OX Delivers significantly boosts farmers' productivity and income, fostering economic growth.
Scalability and Impact: With proven success in Rwanda, OX Delivers aims to expand across East Africa, tapping into a vast and growing market.
Sustainable Integration: The company's operations leverage Rwanda's renewable energy grid, aligning with global sustainability goals.
Future Prospects: OX Delivers envisions widespread adoption of transport-as-a-service, influenced by advancements in vehicle autonomy and changing consumer preferences.

This episode of The Fully Charged Podcast offers a comprehensive look into how OX Delivers is transforming African logistics with sustainable, innovative solutions. Simon Davis' insights shed light on the intersection of technology, business innovation, and socioeconomic development, highlighting a model that could inspire similar initiatives globally.

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Transcript73 lines

[00:05]
Robert Llewellyn
Hello and welcome to another episode of the Fully Charged show podcast, where if you are watching this rather than listening, you will notice that we're in a rather special location. We're in an electric vehicle workshop in Warwickshire. And no, we are not at Jaguar Land Rover, we are not at Aston Martin. We are in fact, with a very, very special company called OX Delivers, who make incredible flat, packaging, super durable electric vans which they build and operate in Rwanda. And we're here to find out exactly how they create these incredible vans and operate a service which has been referred to as Uber for Potatoes. So, very shortly, I'm going to be sitting down with CEO and co founder Simon Davis to find out all about OX Delivers. But before we get there, a very, very quick advert break. Love everything Electric. Join us live in the south this October and in Australia, London and Canada in 2025. Simon, thank you so much for inviting us here to your wonderful facility here in Warwickshire. We have so much to cover, but I wonder if you could kick us off by just painting a picture for us. Who is OX Delivers and what are you trying to do?
[01:14]
Simon Davis
So we're all about supercharging trade in Africa. And we're here in Warwickshire because we're designing this, the first purpose designed electric truck for the dirt road. Moving goods on dirt roads. And you might say, what's the connection between those two? Well, here, you know, outside there, there's a field of potatoes, and when the farmer's harvest his potatoes, he picks up a phone and a whole logistics chain swings into action. And before you know it, the potatoes are in your shopping trolley and you're taking them home. It's not like that everywhere. If you're a farmer in East Africa, you're picking those potatoes, you're putting them in plastic sacks, 150 kilos at a time. You're then loading them on top of your bicycle. It's like putting two of your mates on the back of your bike and then pushing them to the local town. And that is slow, it's expensive, it's dangerous. And at OX Delivers, we're about making that trade affordable, reliable and clean.
[02:10]
Robert Llewellyn
So there's quite a few components of the business model that I want to go on to, because I've seen in a few articles that you're described as the Uber for potatoes. And that is something that I want to explore in a lot more detail. But before I do, I mean, I know that you currently have trucks operating in Rwanda, a market where typically they would import trucks and vans and cars, maybe at the kind of towards the end of their life. And as such, you know, they're not particularly fit for purpose, not least because the road conditions in Rwanda are not necessarily fabulous. So I wonder if you could describe for us why the existing vehicles currently used are not fit for purpose and how this may differ.
[02:49]
Simon Davis
Yeah, so, yeah, you're right. In Africa, upwards of 90% of vehicles are imported, used, sometimes very used. Like in Nigeria, a quarter of all vehicles imported are 19 years old at the point of import.
[03:02]
Robert Llewellyn
19 years old?
[03:03]
Simon Davis
Yes. Wow. It's extraordinary. And then they have. So none of them were ever designed for the conditions on the continent, where in Rwanda, for example, only 10% of roads are paved. So the trucks are then spending most of their lives on dirt roads, which are dusty and bumpy in the dry season, they're rivers of mud in the rainy season, and so they get trashed, essentially.
[03:30]
Robert Llewellyn
My sister and brother in law have finally admitted defeat on their 19 year old SIA Alhambra. And I have concerns about them driving to, I don't know, to my house, let alone if they're operating on sort of unpaved roads. So you've had to design this and you've had to make it so much more fit for purpose. Now, going through your website and doing a little bit of research, the original vehicle, I believe, was designed by Gordon Murray, who is perhaps best known for designing the McLaren F1. Quite far removed from something like this that is a little bit more utilitarian. However, I also understand that there were several things that he designed that you had to kind of unpick to make this even more fit for purpose. Can you take us through that?
[04:14]
Simon Davis
Yeah. So Gordon was involved back in the start of the project and he does say it's one of the most important projects that he's ever worked on. And the focus from the very beginning was about building a simple and effective vehicle for running on these kind of roads. Nobody's designed a vehicle for use on dirt roads since, say, the Land Cruiser 70, which was launched in the early 80s. But part of the challenge of building a successful business is not just the product, it's also the business model. So what we've been doing since OX Delivers started three years ago is that we've been developing a business model that enables us to get that product into the hands of the people who really need it.
[04:59]
Robert Llewellyn
Okay, I think it's time for us to talk about this business model because this is where I think things get really, really fascinating. So some of the things I've read is that You've said that for electric vehicles, the sales model doesn't necessarily work. Not least because that means that vehicles have to be pretty expensive and not least because you're also having to have some planned redundancy such that those vehicles have a set operating time. And eventually at the end of operating time, you'll buy a new vehicle. And in economies like Rwanda, that simply does not stack up, but an operating model does. What does that mean?
[05:37]
Simon Davis
Well, I think we have to first of all recognize how the car trade works in the uk, right? If I want to go and buy a new car, I'm actually going to buy it on finance. It's not going to be me that buys it, it's the bank. And you go to Africa, less than half of people have a bank account, let alone the ability to raise finance. So access to capital is a massive issue. The reason all these vehicles are imported used is because people don't have the capital to buy new vehicles. But then you also have to sort of question how the business model works here. My mates built a camper van on a conversion of an ex delivery van, but it was a delivery van that was defleeted at only four years old, which is crazy, right? So Mercedes are building a Mercedes Sprinter and then expecting their first customers to come back and buy another one after four years. Like 40 years ago, Mercedes used to build vehicles that lasted for 30, 40 years. Now the model has changed and so if you switch to a service based model, it completely changes the incentives for us. So we don't ever want to take these vehicles off the road, right? We want them to last 20, 30 years. And when they do get to the end of their site, their life, we want to harvest the parts that are left and put them back onto new vehicles. And actually EVs make a lot of sense because the reason you scrap most cars is because there's a problem with the engine, right? And EVs, we know how long Tesla batteries are lasting. You don't have very much maintenance to do. So there's a huge opportunity to really change the business model and instead of building for redundancy, actually building for service, building for a long operating life.
[07:12]
Robert Llewellyn
So building for service. So let me just check if I've got this right, because this is going to be the Uber for potatoes bit of this. So instead of someone just bringing you up, buying a vehicle, owning it, using it till it's destructed, and then buying a new one, you're actually doing this much more as kind of vehicle, as a service model. So If I was a farmer in Rwanda, how does that work? How do I interact with ox delivers?
[07:34]
Simon Davis
Yeah. So I'll give you an example of a chili pepper farmer called Jean Pierre. And his route to market used to be chilli peppers onto a bicycle and push them to the nearest town, then put them on the roof of a bus, which takes him across Rwanda. Then when he arrives at the bus station in Kigali, he would then get a moto taxi, put them on the back of a motorbike, and take them to the export point and sell chilli peppers. What he does now is he rings up ox delivers and books a space on the back of a truck. We come and collect his goods, we deliver them straight to the delivery point, and instead of having a two day round trip, he's doing it in three or four hours. And obviously that means it's so much more productive. He can spend much more time on his farm and much less time traveling. So he's gone from doing, you know, he used to do one trip a fortnight with 3 or 400 kilos. But can you imagine taking 3 or 400 kilos of chili peppers on a bus? He now sends two trucks a week. So he's more than 10x'd his business because he can get goods to market.
[08:37]
Robert Llewellyn
That is absolutely unbelievable. And okay, this might be a stupid question, but presumably he was traveling with the chili peppers before. He's now sending them, and then they're dealt with at the other end. Or is he also on the truck as well?
[08:51]
Simon Davis
So, no, we deal with it for him most of the time. Because the reason people travel with their goods is because the trade isn't reliable. Like here. No farmer would travel with their goods taken to market. We know the system's work. And this is why our overall vision is all about supercharging trade. Because we're going from a situation where people are having to physically carry their goods and go with them to make sure they get paid and all that. At ox, we handle that transaction for them.
[09:17]
Robert Llewellyn
My gosh. Okay. I have so many other questions. This is like opening up Pandora's box. Which direction are we going to go in? So from your sense then, you own the vehicles and then your sort of business model is that you basically lease out space in a truck?
[09:33]
Simon Davis
Yep.
[09:34]
Robert Llewellyn
Okay, so. And does that mean that, you know, anyone can book a slot and they might not have to take up the whole space, but they might be sharing the space with various other farmers as well?
[09:42]
Simon Davis
Yeah, absolutely. This is a key part of the business model because you know, to fill a whole truck worth of goods is a lot of. Requires a lot of stuff. Right. Farms in Africa typically are much smaller scale than we're used to here. It hasn't been the consolidation. So we can enable someone to use transport when their other option would be a bicycle. But it also applies all the way through to big corporates. So we serve, you know, a big fish farm in Rwanda. And their real challenge is they have limited amounts of capital, they're venture backed, but they really want to be spending their investment on fish farming equipment, cages, freezers, fish processing facilities. They don't want to be spending all that capital on vehicles. And they don't have the third party logistics providers that we would have. They can't just ring up Eddie Stobart. There aren't businesses like that in the market.
[10:33]
Robert Llewellyn
And so. Okay, I'm going to check my notes here because one of the things that I've read in my research is that currently, for example, the price of bananas, they cost 10 times more in the city than they do in the villages. And that's because that logistics cost is currently so expensive. And obviously farmers need to recoup that cost. So are you seeing anecdotally that actually are farmers making bigger margins or are the prices coming down in cities?
[10:59]
Simon Davis
Well, you're right, you get these huge price deltas because essentially if you're a farmer, particularly if you have a good year, the people around you also have a good year. So prices actually fall. But you know, in the cities, if you, if you can't reach the tomatoes, you know they're worthless to you. The value is always created in the movement. And if I give you an example of one of our clients is a lady called Beatrice, who's a wholesaler of tomatoes. So she was buying tomatoes from farmers. They would bring them down from the hills to a local market, she would buy them there. And then she's got three options. She can walk with them, put them on the head, put them on a bicycle, or wait for a bus. And she used the bus. But waiting for a bus can be a multi day affair. Right. And all the time you're sitting by the side of the road, you'll sleep there. So nobody steals your tomatoes. And obviously the value of your tomatoes is going down because they're sat in the sunshine. And she had. And so since working with Ox, she's gone from trading about $70 a day in tomatoes to $700 a day.
[11:58]
Robert Llewellyn
Wow.
[11:59]
Simon Davis
And that's enabled her to buy a piece of land for a couple of thousand dollars. And she actually, the best bit is she wants to build a house. And she told me last time I was in Rwanda that she was going to call it the Ox House because we've made it possible for her to do that.
[12:12]
Robert Llewellyn
So the potential impact, I mean, is absolutely huge. What's the scale of your operation currently?
[12:18]
Simon Davis
So to date we've served about 5,000 customers, which has really enabled us to prove this model works. Right. That was the big question is, can people afford to pay for transport? That's why other car businesses don't go to Africa. They perceive there's no market there, but we've proven we've generated significant revenues from real paying customers. But that's a tiny fraction of the market. Rwanda is 13 million people alone, East Africa 300 million. And it's a market that's growing enormously. Africa will be the most populous continent very soon and is doubling in population over the next 20 years.
[12:57]
Robert Llewellyn
Talk to me about the process of actually booking a slot in the truck, because I've read that 80% of Wurundenese don't have access to a smartphone. And that huge kind of digital accessibility must be a component that you have to consider in all of this as well.
[13:12]
Simon Davis
Yeah, there's smartphone penetration is lower. I think it's probably more than 80% have access. You know, 2G phone penetration is very high. Almost all business people will have a 2G phone. And so right now we have a short dial number. So you dial a four digit number in Rwanda to book a ride. We also have plans for what's called a USSD app. So you might remember from back in the day when you had a pay as you go phone, you could put a code in, it would tell you what your credit was. Now we don't really use it in the uk, but that's heavily used for things like mobile money in Africa. And so it's kind of like having an SMS conversation with a machine. And so we can build an app that enables people to book a ride much more simply than you would open the phone. Obviously, we're talking here about logistics. Right. People's farms don't move, for example, so people can have a couple of saved locations of where they're delivering from and to, and you can do most of the transactions you'd need to do just by a 2G phone.
[14:16]
Robert Llewellyn
So you have operations here in Warwickshire. The engineering team is based here in Warwickshire. Are you shipping these vehicles straight to Rwanda like this? And the reason I ask is because they look to me pretty flat Pack assembly proofed. How do you ship them?
[14:33]
Simon Davis
Yeah, so today we're shipping fully built vehicles. But the plan absolutely is to get to Flatpak. That was one of the core innovations back from the original start of the project, was recognizing building vehicles is complex. Right. You know, there is outside of South Africa and the very northern countries in Africa, there is next to no manufacturing and very, very little of vehicles. VW have a plant in Rwanda, but it's putting steering wheels on and fitting side windows. So what Flatpak enables us to do is ship efficiently. We can get six of these in a container and then we put them together in market. So we can take Rwanda on the journey of from building kits to fully built vehicles over a period of time and build up those local skills and capability.
[15:20]
Robert Llewellyn
So I just want to pause on the fact, six of these in one shipping container, that is an extremely efficient way to ship a vehicle.
[15:28]
Simon Davis
Yeah, and this is one of the things about approaching the business model of the automotive industry afresh. You know, most, lots of companies do ckd, knock down build, but almost always they build the vehicle and then take it apart and then ship it. Whereas what we've done is thought about the value chain from the scratch. And so by flat packing then we can reduce our shipping costs, we can drive more local content and obviously that then helps when we come into maintenance and things like that, because we've got the skills in country.
[15:55]
Robert Llewellyn
So I need to ask you about charging infrastructure because Rwanda is a really interesting country in that it's got the grid is already 60% powered by renewables, but only 75% of people are currently connected to the grid. So they've got an interesting challenge in that they're rapidly decarbonizing but also having to rapidly expand their grid at the same time. I imagine that presents various challenges from a charging infrastructure perspective.
[16:20]
Simon Davis
Yeah, so yeah, Rwanda has a very green grid. Actually, Kenya is even greener. It's 90 plus percent green because there's so much hydro, geothermal, obviously solar opportunity. And so there's a lot of investment going into clean energy. And one of the things about Africa is their level of growth means they're building lots of things from scratch. So they're not dealing with old infrastructure. Like, you know, they've never built a landline infrastructure. They went straight to mobile phones. And that's a real opportunity with vehicles as well. You know, going straight to EVs, skipping out diesel vehicle ownership. The good thing about what we're doing is obviously we're commercial logistics. So our routes are planned and they're known and they're stable. And therefore charging can be done at base. We don't need charges spread all over the country. And so our trucks are charged basically each night at home and we position those bases on the major grid lines. And you talk about like the electrification levels and that's household electrification. And one of the key challenges there is if you connect a household, you might spend a dollar or two a month on energy. And that doesn't make any economic sense. What's great about electric vehicles is you put $20 of electricity into this and you'll make $200 in revenue. So the economics of it, superb. So actually EVs are a great way to drive electrification because you're building the economy and driving productivity. And obviously as you do that, then people can afford to electrify their homes as well. You've got to start with the most productive use of energy. And actually a fridge is not a particularly productive use. Right. It's convenience, not value add.
[17:56]
Robert Llewellyn
And there's a number of interesting EV incentives within Rwanda, from what I understand. Talk to us about this.
[18:01]
Simon Davis
Yeah, because it's really in the interest of the government to go ev like Africa biggest import is oil and it's sending dollars out the country to buy oil. And so going EV replaces that with a locally generated source, creates value in the country. So for example, as an EV operator, we get access to the industrial level tariff from day one. So your charger isn't charged at domestic rates, it's charged at industrial rates. There are reduced import duties for EVs because they can see the real advantages to the economy.
[18:36]
Robert Llewellyn
It's really evident to me that we're kind of on a precipice of seeing a huge step change within the economy and within sort of the appetite for new technologies, electrification, et cetera, et cetera within East African countries. And actually I read recently that BYD has just announced that it will partner with Rwanda based electric motorbike company ampersand to build 40,000 bikes in Rwanda and Kenya. So clearly things are going to change pretty substantially. What would you anticipate happening over the next kind of five to 10 years?
[19:07]
Simon Davis
That's a tough question. There's just so much opportunity. One thing, the growth over the next five to 10 years, the workforce will have increased by 75%, I think, in that sort of timeframe. And there is no reason why, you know, EVs can't dominate the landscape if we get the right business models. Right. The classic expecting consumers to buy them is not going to happen, but with models like this and also Ampersand, who are doing. They're doing electric motorbikes. Motorbikes are the dominant taxi in East Africa. And it's cheaper to operate an electric motorbike than it is to run a petrol one. So it just makes sense. Same as here, you know, it's cheaper for us to run EVs with our business model than it is to run diesels. And so it can be the dominant opportunity.
[19:53]
Robert Llewellyn
So I know that your background is in traditional automotive engineering. Like many people, your background was at Jaguar Land Rover. I've made this joke many times, this podcast, but all roads stem from Leamington Spa. Certainly seems that way, but. So I want to know a little bit more about the engineering that's gone into this vehicle, because unlike a Range Rover or a Jaguar, you've had a vastly different engineering challenge here. You've had to create something that you know can be hugely durable, that it can last a long time, and then it makes sense from an operating point of view. What were some of the things that you put on that kind of initial design criteria?
[20:32]
Simon Davis
Yeah, so obviously the roads are the biggest difference. You know, most products are designed even off road. Products are designed for 90 plus percent tarmac and a little bit of dirt. We see from our data that our trucks are spending half their time on dirt roads in the current operations. In the summer, in the dry season, they're dusty and they're bumpy. In the rainy season, they're rivers of mud. So resilience is really important, durability is really important. But overall, the most important thing is total cost of ownership. This is a huge market, but it's an extremely price sensitive market. And so we have to deliver a total cost of ownership that's a tenth of the local alternative. And actually that's a really refreshing approach. Our whole model with the circularity really changes how you think about it, because we're prepared to invest money in the vehicle in order to deliver lower running costs. And my journey at Jaguar Lander started as chassis engineer, worked in strategy for a long time, and then ended up in building software. And we've taken a lot of lessons from the way the software industry build vehicles, because, you know, thinking about, for example, data and monitoring vehicles in use, consistently updating vehicles, and so that we can really drive that low cost of ownership. It's not about trim levels or model years, it's about how do you move stuff cheaply on dirt roads.
[21:59]
Robert Llewellyn
I also just want to pause on a tenth of the operating Cost of the local alternative.
[22:03]
Simon Davis
Yeah.
[22:04]
Robert Llewellyn
That is phenomenal.
[22:06]
Simon Davis
Yeah. And the reason is the local alternative is insanely expensive. So I've talked about the conditions already. Right. When we started three years ago, one of the first things we did is we wanted to test the market. Can people afford to pay? How does all this work? And so we went to Rwanda and we rented a truck that in itself was expensive. We were paying $1,000 a month to rent a fairly well used pickup because there's just a shortage of vehicles. And then we ran it, delivering goods for our customers. And what we found was we spent as much money on fuel as we did on maintenance. So can you imagine going to the garage and every time you put 80 quid in the tank, you're also getting an 80 quid repair bill. And it's a function of the fact the vehicles weren't designed for the conditions. You're running fully laden on dirt roads. And so to run a pickup in Rwanda costs you five times more than it does here. So. And we all know EVs are cheaper than, cheaper than diesels. Right. To run because of the energy costs and the maintenance costs. So, you know, it's 10 times cheaper than the local alternative. Basically means it's half the price of running a Hilux in the uk.
[23:14]
Robert Llewellyn
Wow. Wow. And I think that sort of emphasizes the point that actually there's a huge transportation equity piece here.
[23:21]
Simon Davis
Yes.
[23:21]
Robert Llewellyn
And how we need to consider just this isn't just about powertrains and having clean electric vehicles. This is around allowing people access to transportation, which, as we know, gives them access to business, social opportunities, voting, health care, all those good things. And it's so vital that it is affordable within specific markets. Sorry.
[23:44]
Simon Davis
We're so used to having easily available transport here, we just don't even think about it. But ultimately, this country was built on the back of a massive navy. We want to send something somewhere. You pick up the phone, you go on the Internet, it just happens, happens. We're so used to it. But actually, as soon as you don't have it, so many things, you know, Amazon doesn't exist in Africa because they can't deliver. A few people have tried to copy them. It doesn't work. You know, so many opportunities, you know, some you can have a diamond ring, but if I can't get it to you, it is worthless to you. And we don't think about that problem. But it's a huge problem for about 3 billion people on the planet.
[24:22]
Robert Llewellyn
Wow. And it's so interesting that you actually started with Understanding how the operations work before you went away and designed a vehicle was that. I mean, talk to me how you became involved in this project in the first place.
[24:36]
Simon Davis
So I worked at JLR for many years. I heard about the project. I think I read originally about it in autocar. My wife stuffed it under my nose and so I got a little bit involved, met a few of the people, pitched it into Land Rover a couple of times. But ultimately it's such a different approach that you can't get your head around it when you're sat in a big automotive. So I left Jaguar Landrover as part of the redundancies in 2019 and was kind of wondering about what, you know, what to do. And so I volunteered to help. And they said, well, our only employee is leaving, he's part time and underemployed, so why don't you have a go? And so kind of, you know, I started looking around. My co founder Natalie, joined. After six months, we started doing more research. We applied for some grants and then ultimately won some funding from Innovate UK and the Advanced Propulsion Centre. And that enabled us to hire. And we got. I drove the prototype we had to my first investor's house and parked it on his drive and we got our first investment and that hired the first team of nine and we've just grown from there and we're at 127 people now.
[25:45]
Robert Llewellyn
127, yeah.
[25:46]
Simon Davis
So two thirds of the team were in Rwanda, physically delivering stuff. And then we've got a team here in the uk. Well, most of the engineering stand in the uk. We've got some engineers in Kenya and then a few people around the world who do the business stuff.
[26:00]
Robert Llewellyn
Oh, my goodness. I mean, that's quite a phenomenal ride in. That's quite an incredible pandemic that you had, to be honest.
[26:07]
Simon Davis
Yes, it was, yeah. I was working at home on my own before the pandemic made it trendy. And then, yeah, when we originally started, we used to meet in a church hall because we meet up once a week because that was kind of all you're allowed to do. And we were fully remote for the first couple of years.
[26:24]
Robert Llewellyn
So it must be really quite amazing to be able to see that you've got 4,000 customers. That's absolutely astonishing growth. But what happens from here?
[26:34]
Simon Davis
What happens from here? Grow, grow, grow. So we've got some big announcements coming over the next few weeks. This is a huge opportunity. You know, in fast forward a few years, we'll have hundreds of trucks running on the road serving tens of thousands of customers.
[26:51]
Robert Llewellyn
Do people always get it? Because I imagine you've had to have quite a few conversations where people like, oh, what are you up to, Simon? You're like, oh, well, I'm doing this thing called Ox Delivers. We're moving to a new, different kind of operating model where it's sort of a transport as a service rather than you have to buy a van. And I imagine some people, like, all right, do people get it?
[27:13]
Simon Davis
Those that get it absolutely love it. And some people are a bit confused by it. You know, it is, I think, what is critical. And if you look at all the successful startups, they change the business model and change the product. You know, both come together, whether it's Tesla with the dealer model or whether it's mobile phones, where you bundle the mobile phone with the contract. It does require a level of change and it's not a market many people are familiar with. But that doesn't mean it's any less of an opportunity. Right. It's, you know, the best opportunities are hidden in plain sight. And this is definitely one of those.
[27:44]
Robert Llewellyn
So slightly more existential question for you.
[27:46]
Simon Davis
Yeah.
[27:47]
Robert Llewellyn
Because, you know, whenever we do anything on particularly big SUVs on the channel.
[27:52]
Simon Davis
Yeah.
[27:53]
Robert Llewellyn
Invariably there'll be comments saying, oh, brilliant, more massive, oversized vehicles for people that don't need them. And we need smaller, cheaper, lighter electric vehicles. But we could also argue that actually we need fewer vehicles that last longer, that we have more of these kind of transport of the service models. Do you think there's a space for something like this in the UK and in European markets?
[28:16]
Simon Davis
I think transport as a service is definitely a revolution that's coming. None of the existing manufacturers have managed to really get it. They tried, but it's not worked. Because, you know, you're right, we build vehicles and they sit still most of the time. That doesn't make any sense. And obviously in the west, the big barrier is the cost of drivers. You know, we'd all be using Uber if we didn't have to pay drivers anything. But autonomy hasn't quite come. And the point it does come is going to be a transformational change. Right. Because why would I own an autonomous vehicle? I just go on my phone and press a button and it will be fine. In emerging markets, the late, the driver cost is significantly lower, so they can actually go there sooner to this shared model. And to my mind, we all know EVs are going to unlock a cost of ownership save versus diesels. In my view, this move to a as A service based model is at least a bigger change again because we should be building vehicles that last decades. We should be constantly refining and improving those vehicles and it will completely change how we think about products. You know, we wouldn't. You should look at how Spotify has changed music collection or Netflix has changed video ownership. Right. We wouldn't even dream of owning those things now. Like why do we own vehicles? Why? You know, and it's partly because we've spent the last hundred years persuading people that cars are an extension of our personality. They're not really, but it's a good way of getting people to put their hands in the pocket.
[29:49]
Robert Llewellyn
It's so interesting. You're absolutely right because, you know, I bet most people listening to this podcast at some stage have either still got a big box of DVDs stashed away in a loft somewhere or are like, God, why on earth did we did we buy these in the first place?
[30:05]
Simon Davis
We'd never go back. Right. And it's kind of one of the transition to as a service is the same. It's hardest in the markets where you've got the most embedded. The people who switched to Netflix last were the ones with the biggest DVD collection. The same is true of vehicles. We've got the biggest car collection in the west, so we will switch to as a service later. In Africa, they don't have a big car collection. So as a service just makes sense. Why would I buy one? I can just use this.
[30:34]
Robert Llewellyn
And I think from an innovation perspective, it's really interesting looking at some of the things going on in various African countries whereby they have, as you say, leapfrogged certain things. For example landlines and going straight to Internet enabled phones. In this instance, maybe leapfrogging private vehicle ownership to transport as a service models. So, okay, so I mean it has been no question an extremely successful five years since you've been in this business, but I imagine at points extremely stressful as well. What have been some of the really big meaty challenges along the way?
[31:10]
Simon Davis
The, you know, we're doing something here that's a bit different. Right. And as much as people who invest in innovation like to say they support innovation, they also like to invest in things that they can get their heads around that are normal. Right. Everybody wants to invest in AI at the moment. Guess why? Because AI is the trendy thing and this isn't the trendy thing. Right. And so that's been a real challenge really explaining to people about a situation that's outside of most of Their people's experience and mobilizing capital, I guess, has been our biggest challenge. There's lots of other engineering challenges and people challenges. Building a business that spans a couple of continents, getting the right people who can really kind of take a fresh approach. There's lots of engineers, but we're very used to as engineers, optimizing things to build big, expensive, shiny cars. Thinking about things, about how do we actually deliver vehicles that last a long time, that live in tough environments is a skill you have to learn.
[32:15]
Robert Llewellyn
So what kind of mindset do you try to cultivate within the engineers and workforce here?
[32:21]
Simon Davis
Well, I think we aim for a data driven situation. One of the big opportunities of as a service is that you continue to own the vehicle so you know what happens to them. You're not guessing from service records. You can actually monitor the vehicle. So making sure that we're pulling data and using that to drive decisions. We also have a big focus on teamwork here. I'm a passionate believer that teams is what delivers and making sure we share information with people. We can all make good decisions, but not if we don't have the data. So it comes back to data again, like making sure we're using data, sharing it properly to enable good decisions.
[32:59]
Robert Llewellyn
And if you could whisper something in your ear of your 2019 self, what would you say?
[33:05]
Simon Davis
Well, Elon Musk has a good quote about, you know, running businesses is like eating glass, and I think that's perhaps a bit harsh. There's some really big upsides to running a business and, you know, being able to start from scratch and really shape things in a way. I guess I'd probably say keep going, it might yet work because, you know, it's uncertainty. There is, there is. You have to build your own momentum and keep your own momentum. We've seen all the challenges that the other EV startups have faced over the last few years. You have to make your own success. And so continuing to focus on that is the key, I think.
[33:44]
Robert Llewellyn
Well, honestly, thank you so much for joining us on this podcast. Thank you so much for sharing with us all of the story behind this incredible vehicle. And personally, I think we should have a fully charged trip out to Rwanda.
[33:57]
Simon Davis
I think it'll be a lot of fun. It's a very beautiful country. And, yeah, you'd be able to see the impact on the ground of how it changes people's lives, you know, and that's the great thing about ox, right, is we've got some exciting engineering challenges. We're making a real difference to people. In terms of their ability to, you know, build successful businesses and access healthcare and education, all those other things. And it's good for the climate. Like it's a real win, win win business.
[34:28]
Robert Llewellyn
I personally really, really enjoyed that conversation with Simon and I think it is so amazing that companies like OX Delivers exist that aren't just looking at creating clean transportation, but transportation that is inclusive and can unlock huge economic opportunities. So if you enjoyed this episode or if you find OX Delivers interesting, please do share this episode and spread the word that they exist. Now if I could ask for one little favor before you go. If you could like comment, follow or subscribe, it would be so appreciated. It really helps to ensure that we can keep covering important and interesting topics in this clean energy transition. But that's it. That's all we have time for. If you have been, thank you for listening.