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Is there a future for Electric Vehicles in Nigeria?
Caleb Adebayo by Caleb Adebayo June 22, 2021Reading Time: 3 mins read
Vice President Osinbajo test drives Nigeria’s first locally assembled electric car
On Tuesday last week, Nigeria’s Vice President, Yemi Osinbajo drove Nigeria’s first locally assembled electric vehicle (EV), Hyundai Kona, launched by Stallion Motors. The reactions that have trailed the Vice President’s test drive – and seeming acceptance – of the EV has raised questions as to what the future of EVs are in Nigeria.
The conversation about EVs in Nigeria has been led by the National Automotive Design and Development Company (NADDC) since last year, especially with the launch of the Hyundai Kona in November 2020. The conversations intensified this year with the unveiling of the automobile in February by the Federal Government and the commissioning of the first EV charging station in Sokoto, in April.
Only two weeks ago, popular transport and logistics company, GIG Logistics also deployed a fleet of EVs assembled by Jet Motor Company, and with it, charging stations. In the same vein, neighbouring Ghana has begun receiving used and new solar-powered EVs from China through SolarTaxi, a company based in Ghana that provides these vehicles for rent, long-term lease or outright purchase.
In spite of the progress realized, the challenges that face the commercial-scale deployment of EVs in Nigeria are numerous. The most glaring is the fact that power supply is epileptic, with almost 80% of those with access to power getting less than 12 hours a day, and about 47% of the population without access to power at all. Commercial deployment of EVs can only happen when the ailing power sector has been overhauled. Additionally, most of the power generated in Nigeria comes from private generation, which typically comprises diesel and petrol. Burning these fuels for long hours, coupled with the attendant noise pollution to power electric vehicles seems counterintuitive.
Further, Nigeria does not have an EV policy. While the country has an automotive policy that aims to encourage local manufacturing of vehicles, it does not have one that specifically touches on EVs, which have significant differences from internal combustion engines automobiles. Luqman Mamudu, former Director of Policy and Planning at the NADCC while speaking on targets the country was setting for electric vehicles, quipped, “How can you be setting a target when you don’t even have an electric vehicle policy? These are just mere wishful thinking by whoever said it.”
The high purchase cost is another challenge, especially as there are not so many used ones being sold on the market yet – and Nigeria is known for its regular importation of used cars. Aminu Jalal, former Director General (DG) of the NADDC revealed in 2016 that about 150,000 used vehicles are imported into the country annually. This second-hand challenge may however not affect the upper class and may, in fact, spur their patronage for EVs. As Nigeria thrives on status symbols, such upper-class people and certain middle-class ones may purchase EVs due to the prestige attached to owning them.
Other factors that may favour the future of EVs in Nigeria include stakeholder interest in pushing them into the market. The DG of the NADDC, Dr Jelani Aliyu recently mentioned that the institution is partnering with automakers to realize the dream of embracing EVs. The appetite for EVs also seems to be rising as the prices are falling. In its Global EV Outlook for last year, the International Energy Agency reported that sale of EVs topped 2.1 million globally in 2019, from about 17,000 in 2010, compared with an estimated 7.2 million today. According to Mr Jalal in an interview, “No doubt Electric Vehicles are the future, maybe in the next five years.”
If that holds any water, this is a prime moment for the government to commence designing a policy framework for EVs. It is admirable that the Senate has proposed an Electricity Act to be passed next year – this would help structure the operations of the power sector for more efficiency, and inevitably support an EV rollout. Also, should the 11, 000MW supply promised under the Presidential Power Initiative materialize, it would also increase patronage for EVs since a major constraint is power supply.
Initiating credit and auto-financing schemes for the purchase of EVs will certainly grow the market too, akin to what SolarTaxi is doing in Ghana. With EVs being cheaper in terms of fuelling and maintenance costs than fossil fuel automobiles, it is a prime area for Nigeria to capitalize on and significantly reduce the cost of transportation, both commercial and private.
A possible blind spot Nigeria may consider to grow the EV market is introducing commercial two and three-wheeler EVs, as has been done by ARC Ride in Kenya, especially since these are already being used across Nigeria for commercial transport. By floating this, the EV model can be widely tested and it can hasten the birth of many charging stations across the country, thus aiding easy access to stations for four-wheeler EVs as more people acquire them.