The EV Wave: Is Nigeria Ready?

Chigozie Obi* and Ifeoma Malo**

With the exponential growth in sales of Electric Vehicles (EVs) globally, it is becoming clear that the future of mobility will be electric. In 2019, electric vehicles sold 2.1 million globally, a 40% year-on-year increase. However, Africa has not fully caught the wave- its largest market South Africa only sold 1,200 cars in 2019.

In November 2020, history was made in Nigeria. Stallion Motors in collaboration with the Lagos State government unveiled the Hyundai Kona, the first locally assembled EV in the country. Earlier this year, the Federal Government of Nigeria, through the National Automotive Design and Development Council (NADDC), followed up with a showcase of the eco-friendly car in Abuja. Furthermore, it announced a partnership with three universities to teach EV Pilot Program. This was a clear statement of intent, that the country is ready for the EV wave; but is Nigeria really ready?

Electric Mobility in Nigeria

The growth in EVs globally is a direct result of many countries adopting decarbonisation technology policies as part of a green revolution- which involves transforming their automotive industries. For example, in the UK, the government banned sale of new fossil fuel vehicles by 2030, while Canada banned its sale by 2035, and in the EU, ministers passed a regulation to make the bloc’s net zero emission by 2050 legally binding.

Electric vehicles offer more benefits than conventional internal combustion engine (ICE) cars. Firstly, they are cheaper to maintain than fossil fuel cars, as they are battery powered and only need to be recharged. Secondly, they are eco-friendly with zero emissions, helping to reduce greenhouse gas emissions.

The launch in Nigeria was a huge step for its automobile industry, where the NADDC is seeking to transition to cleaner vehicles. However, there is no regulation by the Federal Government of Nigeria to drive adoption of EVs, and no clearly documented policies on EVs. Currently the transition to electric mobility is largely driven by the private sector and state governments.

Private Sector Initiatives in Nigeria

Many local manufacturers have made plans to start building electric vehicles in the country. Last year Innoson Motors announced plans to build E-cars, while Jet Motors, a Nigerian automobile startup raised $9m USD in foreign investment to start manufacturing electric cars in Nigeria. At the state government level, Lagos State announced intention to support manufacture of EVs locally and build charging stations.

Electric cars are relatively new in Africa, but when we talk of E-mobility in Africa it is important to look beyond cars. E-mobility in Nigeria includes electric buses, motorcycles, and rickshaws (“Kekes”)- and this is where we see more activities of plans to pivot to E-mobility. For example, Egbin Thermal Power Station launched 20 E-buses and 500 bicycles to promote clean energy. While Max.ng, the motorcycle ride hailing company, plans to convert all its motorcycles to electric bikes. In Ebonyi, the State government launched the zero-oil initiative to support production of electric “kekes” and buses.

Despite all this, one thing is missing for the country to be ready; political will from the Federal Government. The country needs the Federal Government to create an enabling environment for EVs by tackling the barriers preventing its mainstream adoption nationwide.

The Challenges of EVs in Nigeria

A major challenge to EVs in Nigeria is that the regulatory environment is young. As mentioned above there is no regulation on EVs or any documented policies to support the industry. The last time regulation was proposed was in 2019. Senator Murray-Bruce introduced the Bill to phase out petrol vehicles by 2035, which was wholly rejected by his fellow lawmakers.

On the demand side, E-cars are too costly. The Hyundai Kona will cost a whopping $63,000 US Dollars or N24,000,000 Naira- suffice to say that price tag is far beyond the reach of the average Nigerian. This is because EVs are not mass produced as compared to fossil fuel cars- so they lack the cost savings from economies of scale of mass production. Although E-buses and E-kekes are more affordable to the masses, they still need to be charged. This leads to the biggest challenge of all- lack of electrification.

It is well documented that Nigeria’s grid has underperformed over the years, currently supplying 4000MW to 200 million people. More than half the population don’t have access to stable electricity. EVs need electricity to charge the batteries it relies on. The problem is twofold; 1) lack of electrification and 2) lack of charging stations. So to answer the question, is Nigeria ready for the EV revolution? No. However we could be, with the right policies in place.

How can Nigeria be ready for EV?

Firstly, it is clear that the NADDC supports EVs, by launching the Kona, and partnering with universities for courses on EVs. However the country needs the Federal Government to lead the way in creating an enabling environment- by setting a policy framework to support local production of EVs. Furthermore, the government can draft regulation to set standards through the NADDC, in order to enable mainstream adoption of EVs in a suitable amount of time in the future.

Secondly, the Federal Government can support local production of E-kekes and E-buses to offer cheaper EVs to the public. With regards to E-cars, government commitment in the form of policies and regulation will attract DFI to boost local production. By signing MOU with VW to locally manufacture cars the government is going in the right direction for the automotive industry. Now it needs to go a step further to extend its support for Renewable Energy by providing finance for Electric Mobility.

Finally, Nigeria needs to increase electrification to support maintenance of EVs. Off-grid Solar Mini Grids can support charging EVs. Furthermore, the government needs to build battery charging and battery swapping stations for EVs. In South Africa there are 180 charging stations already, while in Kenya, the Kenya Power and KenGen plan to roll out charging stations nationwide, at motorways, parking lots, and malls. The Lagos state government has pledged 12 charging stations in the state. So more needs to be done nationwide for the country to be ready to adopt EVs. There is a growing business model of solar MG companies partnering with automobiles to build battery charging/swapping stations in communities that use EVs. The Federal Government can take advantage of this partnership and provide funding to scale up the number of charging stations nationwide.

For the country to readily adopt EVs, we need the Federal Government to collaborate with the private sector to create an enabling environment for EVs to roll out. It starts by setting up a national policy for EVs and drafting regulation to document action plans for stakeholders in the industry to follow.

*Mr. Chigoze Obi — is an Associate on Partnership and Stakeholder Engagement

**Ms. Ifeoma Malo — is CEO of Clean Technology Hub