When Elon Musk unveiled Tesla's first “master plan” in 2006, it seemed a bit far-fetched that batteries would transform the auto industry, much less global electricity production and consumption. But today, as electric vehicles continue to gain market share and giant batteries remove smoke-belching power plants from the power grid, the idea seems less far-fetched. This year, in the United States alone, developers plan to add 15 gigawatts of grid-scale battery capacity.
But Michael Spencer believes the changes happening in the US, Europe, China and elsewhere are just the beginning: “There's a lot of room and potential for Tesla's master plan to be executed at a lower bar in emerging markets,” he told TechCrunch.
To prove this point, Spencer, a former Tesla employee, founded Zeno in 2022. The startup, which has operated in secrecy until now, is methodically exploring how batteries could change life in emerging markets, starting with East Africa. The company has assembled some serious talent, including Swaroop Bhushan, who designed the Lucid powertrain, Rob Newberry, who oversaw the development of Apple's AirPort and Apple TV, as well as talent from Gogoro, Tesla, and more. Zeno's first product is a motorcycle with a swappable battery.
But in Spencer's vision, that's just the beginning: swappable batteries will be used in other parts of people's lives beyond just powering bikes in Africa.
Motorbike taxis, known as boda bodas, are ubiquitous in East African cities, helping people get through traffic jams at far cheaper rates than taxis or private cars, but the costs for their drivers can be astronomical: Motorbike taxi drivers spend about 50% of their income on fuel, compared with just a few percent for California commuters, Spencer said.
Inspired by Taiwanese startup Gogoro, which pioneered the scooter battery-swapping concept, entrepreneurs across Africa have come up with their own twist: Scooters have holes in their bodies into which drivers can slide rented batteries. When the battery is nearing empty, drivers can find a nearby site to swap it for a fully charged one. As a result, swapping stations from startups like Ampersand Solar, Arc Ride, Roam, Spiro, and Zembo have sprung up like grass after a monsoon rain.
Zeno is a recent entrant in the field. The company began by testing around 40 Chinese-made electric bikes of various models in Kenya to see how they performed. The bikes broke down after just two months; they weren't suited to taxi operation on East Africa's harsh roads. But Spencer said the experience proved his hypothesis correct. And it led to another discovery:
“There were a lot of questions like, 'Why can't we use these batteries for something else?'” Spencer recalls. “Some people were trying to modify the batteries to turn on lights or run flour mills in their stores during power outages.”
The Zeno team knew they needed a more durable, heavier bike that could carry a driver, one or two passengers, and maybe some luggage. The company is working with a manufacturer in India to produce one to its specifications, and Spencer said that shortly after that model is available, other manufacturers will be releasing their own two-, three-, and light four-wheel bikes that are compatible with the company's batteries.
Bigger bikes need more power, which necessitates bigger batteries. Zeno's lithium iron phosphate (LFP) battery packs can store 2 kilowatt-hours of power, and its bikes can fit two packs. With one midday swap, Spencer says, the bikes can get a slightly longer range than most taxi drivers need in a day.
The excess capacity “opens all sorts of other doors.” Spencer and his colleagues have begun building docks so people can use the excess power from their bikes to charge their phones and run various appliances.
“We built a prototype induction cooktop that runs on swappable motorcycle batteries, and it's a really cool little microcosm,” Spencer said.
A motorbike taxi driver can go home after a day's work, plug the battery into the stove to cook dinner and have breakfast the next morning. At that point, he'll have 10-15% charge left, enough to go back to town and swap for a fully charged battery at a self-service station. Every part of the system has an internet connection, so the company can monitor the batteries, forecast demand and facilitate financing. The motorbikes use Type 6 connectors, so drivers can plug into public chargers during their lunch break or charge overnight at home if needed. The company is also building a charging network available to non-Zeno drivers.
Zeno's first bikes are expected to hit the roads of East Africa and India in early 2025. Customers will buy or lease the vehicles, which will be cheaper than new gasoline-powered models when configured without a battery. The startup will lease the battery on a subscription model (though it can also buy the battery outright if it prefers). Customers can add energy to their subscription bundle or buy it separately in a pay-per-use model. Zeno's goal is to undercut a gasoline-powered bike in the upfront cost of the bike and the initial battery subscription. And because the cost of electricity for an e-bike is about half the cost of fuel for a gasoline model, Spencer said the savings will add up over time.
Soon after the bike's launch, the company plans to release a home battery dock with a solar panel, which Spencer hopes will open up new markets.
“If you can't connect to the grid, you can take the battery home from the swap station and use it to power your home. If you want to install a solar power system at home, the home docking station acts as a solar inverter to charge the battery. So, even if you've been a Zeno battery subscriber for 10 years, you won't have to replace the battery.”
The company recently raised $9.5 million in an oversubscribed seed round led by Lowercarbon Capital and Toyota Ventures, with participation from 4DX Ventures, Active Impact, Advantedge, MCJ and RedBlue, to fund launch and expansion.
Zeno's strategy is certainly similar to Tesla's, offering customers electric transportation with a low cost of ownership. But by focusing on portable batteries, Zeno is selling the ability to use energy at any time, which is closer to how people use fossil fuels today. While the bike is a central part of the sales pitch, the real selling point may be the battery.