VivoPower's Tembo Signs Definitive Heads of Agreement with East Africa’s Leading Vehicle Assembler, Associated Vehicle Assemblers Ltd (AVA)

Rhea-AI Summary

VivoPower International (Nasdaq: VVPR) announced that its subsidiary, Tembo e-LV, has signed a Definitive Heads of Agreement with Associated Vehicle Assemblers (AVA), East Africa's leading vehicle assembler. The 5-year agreement targets 200 vehicle conversions in the first year and 1,600 over five years across Kenya, Tanzania, and other East African nations.

AVA will distribute and locally assemble Tembo's 100% electric utility vehicle solutions, providing local maintenance and support capabilities. The partnership aims to serve various sectors including mining, agriculture, energy, safari, NGO, defence, and government. AVA's facilities can assemble 30,000 vehicles annually and currently work with major OEMs like Toyota, Fuso, and Volvo.

The agreement complements Tembo's existing partnership with ETC Group in Kenya and supports the region's transition to sustainable transportation. Tembo's next-generation EUV25 electric conversion kits feature reduced pricing due to supply chain improvements, leading to increased market interest.

Positive

• Secured 5-year agreement for 1,600 vehicle conversions with East Africa's leading assembler
• Partnership provides access to market of 500+ million people
• Supply chain improvements led to reduced costs for EUV25 conversion kits
• Partner AVA has 30,000 vehicle annual assembly capacity
• Agreement includes local maintenance and support capabilities

Negative

• First-year target of 200 conversions represents only 0.67% of AVA's annual capacity
• Success depends on unproven market adoption in developing region

Insights

Financial Analyst

VivoPower's subsidiary Tembo has secured a strategic partnership with Associated Vehicle Assemblers (AVA), East Africa's leading vehicle assembler, representing a meaningful expansion into a market of over 500 million people. The 5-year agreement targets 200 vehicle conversions in the first year and 1,600 over the full term, providing VivoPower with quantifiable growth metrics and a foothold in the emerging African EV market.

For a micro-cap company with a market capitalization of just $5.16 million, this deal could deliver material revenue impact, though exact conversion kit pricing isn't disclosed. AVA's credibility as a partner is substantial - they assemble vehicles for global OEMs including Toyota and Volvo, possess 30,000 vehicle annual assembly capacity, and hold the IATF16949 Certification.

Particularly promising is the mention of reduced pricing for Tembo's next-generation EUV25 kits driving increased customer interest. This suggests VivoPower has successfully optimized its supply chain to improve margins while enhancing market competitiveness. The partnership's provision for local maintenance and support capabilities addresses a critical barrier to EV adoption in emerging markets.

This agreement complements VivoPower's existing partnership with ETC Group in Kenya, indicating a methodical regional expansion strategy rather than opportunistic deal-making. The company appears to be executing on its stated strategy of partnering with established regional leaders to deliver electrification solutions.

Emerging Markets Specialist

This East African market entry represents a strategic pivot toward regions where electric vehicle adoption is still nascent but accelerating. East Africa presents unique advantages for EV implementation - less entrenched fossil fuel infrastructure, growing environmental consciousness, and increasing government-led sustainability initiatives. The region's combination of mining, agriculture, energy, and government sectors creates diverse revenue streams for VivoPower's utility-focused EV solutions.

AVA's selection of Tembo after an "expansive review" of competitors signals the company's technological competitiveness in international markets. More significantly, AVA cited Tembo's "cultural adaptability" alongside pricing and quality factors - a important differentiator for success in complex emerging markets.

The agreement's structure - empowering AVA for both distribution and local assembly - aligns with emerging market best practices by creating local economic value and employment while navigating potential import restrictions or tariffs. This approach typically accelerates market penetration while building political goodwill.

The timing aligns with Africa's growing focus on sustainable transportation solutions, supported by increasing international climate finance flowing into the continent. By establishing this partnership ahead of most competitors, VivoPower positions itself to benefit from first-mover advantages as electrification accelerates across East Africa. The local assembly component provides flexibility to adapt vehicle specifications to regional conditions and use cases, a critical success factor in markets with infrastructure challenges.

5-year agreement targeting 200 vehicle conversions in first year and 1,600 over five years

Provides local sales, service, and maintenance, further boosting Tembo’s position in the East African market, a population exceeding 500 million people

AVA’s vehicle assembly facilities have the capacity to assemble 30,000 vehicles per annum

AVA currently assembles vehicles for leading OEMs including Toyota, Fuso, Proto, Hino, Mahindra, Scania, Tata, Volvo and Daewoo

Established in 1975, AVA is the only assembler in the region to have achieved IATF16949 Certification

LONDON, March 18, 2025 (GLOBE NEWSWIRE) -- VivoPower International PLC (Nasdaq: VVPR) ("VivoPower" or the "Company") announced today that its subsidiary, Tembo e-LV ("Tembo"), has signed a Definitive Heads of Agreement (“Agreement”) with Associated Vehicle Assemblers Ltd. (“AVA”), East Africa’s market leading vehicle assembler.

The Agreement covers Kenya, Tanzania and other East African nations. With a population exceeding 500 million people, East Africa is the largest sub-region in Africa and home to the United Nations headquarters for Africa.

Under the terms of the Agreement, AVA is empowered to both distribute and locally assemble Tembo’s 100% electric utility vehicle (EUV) solutions across East Africa for customers in the mining, agriculture, energy, safari, non-government organisation (NGO), defence and government sectors. Crucially, it provides customers and partners in the East African region with local maintenance and support capabilities. This Agreement augments a previous partnership agreement that Tembo signed with ETC Group in relation to Kenya specifically.

The Agreement reflects both companies’ commitment to supporting Kenya’s transition to sustainable transportation and creating value and jobs in local economies across East Africa.

“We are seeing an acceleration in demand for electric vehicles across East Africa, from both government and private sector companies,” stated Matt Lloyd, CEO of AVA. “Having conducted an expansive review of electric conversion companies, we selected Tembo based on their experience, their cultural adaptability as well as the fact they have the most competitively priced products and solutions which also meet our quality and safety standards. Our team is excited to welcome Tembo’s engineers to Kenya in April 2025 as we kickstart the first assemblies for the Kenya market.”

“With the new and reduced pricing for our next generation EUV25 electric conversion kits, we have seen a surge in interest from new and existing customers and partners. This is a direct consequence of Tembo’s strategy to diversify and strengthen its supply chain which has translated into a significant reduction in costs, without sacrificing on quality and safety,” commented Matthew Nestor, Tembo’s Head of Partnerships and Sales. We are delighted to have been selected to partner with AVA, who are the pre-eminent vehicle assembler in East Africa.”

Kevin Chin, Executive Chairman and Chief Executive Officer of VivoPower, stated, "We are honoured to be partnering with AVA. This is part of a considered and patient strategy we have been executing upon globally to identify and build partnerships with long established and credible leaders in their respective markets who are genuinely aligned in terms of values and like us, have a long term commitment to deliver electrification solutions and transformation to entire nations."

About VivoPower 

Established in 2014 and listed on Nasdaq since 2016, VivoPower is an award-winning global sustainable energy solutions B Corporation company focussed on electric solutions for off-road and on-road customised and ruggedised fleet applications as well as ancillary financing, charging, battery and microgrids solutions. VivoPower’s core purpose is to provide its customers with turnkey decarbonisation solutions that enable them to move toward net-zero carbon status. VivoPower has operations and personnel covering Australia, Canada, the Netherlands, the United Kingdom, the United States, the Philippines, and the United Arab Emirates.

About Tembo

Tembo electric utility vehicles (EUVs) are a 100% electric solution for ruggedised and/or customised applications for fleet owners in the mining, agriculture, energy utilities, defence, police, construction, infrastructure, government, humanitarian, and game safari industries. Tembo provides safe, high-performance off-road and on-road electric utility vehicles. Its core purpose is to provide safe and reliable electrification solutions for utility vehicle fleet owners, helping to perpetuate useful life, reduce costs, maximise return on assets, meet ESG goals and seeks to further the circular economy. Tembo is a subsidiary of VivoPower, a Nasdaq-listed B Corporation.

About AVA

Associated Vehicle Assemblers Ltd. (AVA) is East Africa’s leading vehicle assembler, with decades of experience in producing high-quality vehicles tailored to meet the unique needs of the region. Based in Mombasa, AVA has established itself as a trusted partner for global automotive brands, providing state-of-the-art assembly services and technical expertise. AVA’s commitment to quality, innovation, and sustainability has made it a key player in Kenya’s automotive industry, driving economic growth and supporting the transition to more sustainable transport solutions. As a pioneer in the region, AVA continues to lead the way in assembling vehicles that meet the highest global standards while catering to local market demands.

Forward-Looking Statements

This communication includes certain statements that may constitute “forward-looking statements” for purposes of the U.S. federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterisations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about the achievement of performance hurdles, or the benefits of the events or transactions described in this communication and the expected returns therefrom. These statements are based on VivoPower’s management’s current expectations or beliefs and are subject to risk, uncertainty, and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of VivoPower’s business. These risks, uncertainties and contingencies include changes in business conditions, fluctuations in customer demand, changes in accounting interpretations, management of rapid growth, intensity of competition from other providers of products and services, changes in general economic conditions, geopolitical events and regulatory changes, and other factors set forth in VivoPower’s filings with the United States Securities and Exchange Commission. The information set forth herein should be read in light of such risks. VivoPower is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of new information, future events, changes in assumptions or otherwise.

Contact 
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FAQ

What are the target conversion numbers for Tembo and AVA's 5-year agreement?

The agreement targets 200 vehicle conversions in the first year and 1,600 vehicles over the five-year period in East Africa.

What is the assembly capacity of AVA's facilities for VVPR's electric vehicles?

AVA's vehicle assembly facilities have the capacity to assemble 30,000 vehicles per annum.

Which sectors will Tembo's electric vehicle solutions serve in East Africa?

Tembo's EUVs will serve mining, agriculture, energy, safari, NGO, defence, and government sectors.

How has VVPR's Tembo improved its market competitiveness?

Tembo has reduced pricing for its next-generation EUV25 electric conversion kits through supply chain diversification and strengthening, without compromising quality and safety.