Exploring The Obstacles Blocking Nigeria’s Ambition To Dominate The EV Production Industry

Since May, when the APC-led Nigerian government announced its new National Automotive Industry Development Plan, 2023, it has tried to show a good face towards the electric vehicles industry.

As the cost of petrol has risen and the West is pressuring the developing world to join its effort to reduce the carbon footprint on the earth, EVs have been offered as the future of sustainable mobility. As the government removed subsidies on petrol a few months ago and skyrocketed fuel prices in the country, it increasingly looks like the country’s best bet.

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“The whole idea is to bring it up to date with current realities. Also, to put our auto industry on the proper footing, I don’t know if you are aware that we have the capacity today to assemble 400,000 vehicles,” the Minister of Industry, Trade and Investment, Niyi Adebayo, said of the policy.

The Automotive Policy

Since then, the government has enabled a 10-year tax relief for in-country electric vehicle manufacturers. Then it said it has rolled out plans to commence the development of electric vehicles under its Automotive Policy. Last month, it acquired locally-assembled electric vehicles with its charging infrastructure from Nigerian mobility technology company Jet Motors.

The government’s goal, it has repeatedly said, is that foreign manufacturers and, even better, local manufacturers of EVs will set up shop in the country, so the government can meet its promise of Nigeria producing 30% locally electric vehicles by 2033.

“One thing that happens to the auto industry is that when the assembly or companies move into a country to make that investment, which can be anything between $300 to $400 million for the assembly plant. What happens is that the makers of the components that go into manufacturing these vehicles also move to that country to set up competent baking factories,” Adebayo said.

But in a country with a struggling economy, the barrier of entry into this very expensive industry remains high for manufacturers, obviously, but even more so for customers looking to buy EVs for private mobility use.

“Cost of Acquisition of Electric Vehicles is high relative to ICE vehicles,” Joseph Oluwemimo Osanipin the CFO of Jet Motors said“But in the long run, over the life of the vehicles, it is cheaper.”

Jet Motors currently attracts businesses in the mobility industry and its products are mostly buses and minivans that cost around 22 million Naira per one, according to CarMart, the Nigerian car blog. GIG Logistics has signed on as an ardent customer.

Osanipin said that the price problem could be a barrier that the country can move from very quickly with the right campaign and message about EVs’ longevity compared to regular fuel-powered vehicles.

“This fact has to be made known to people through deliberate campaign and sensitization,” he said.

Then there is the existential question hanging over the heads of businesses in the space. How will customers charge their Electric Vehicles?

Access to EV charging stations

In Nigeria, there aren’t enough EV stations to power the entire country and the few are concentrated in just Lagos and Abuja, where the growing number of ultra-wealthy Nigerians that have imported Teslas into the country, the Lamborghini of the EV world resides.

Compared to the United States, where EVs are not popular, there are nearly 43,000 public EV charging stations and around 120,000 charging ports. For Nigerian to even become EV-friendly for customers, it has to provide functioning EV charging stations in all its thirty-six states and multiple functioning EV charging stations in its major cities.

Players in the industry are hoping that the government step in a fund this charging port expansionist movement. “Government also needs to play a role in rolling out high numbers of charging stations across major roads in the country. Develop countries are supporting the massive deployment of charging stations why can’t we?” Osanipin of Jet Motors said.

The move to expand charging centres has already gained momentum among policymakers and ecosystem insiders.

Last month, the Managing Director of Nigerian National Petroleum Company (NNPC), Kanayochukwu Odoe, said that he is in talks to install charging ports across its filling stations nationwide to charge electric vehicles as part of moves to reduce carbon emissions.

Last month, Possible EVS, which bills itself as “Nigeria’s pioneering innovation and sustainable mobility company” announced its flagship product, EV Taxi, Nigeria’s first-ever electric vehicle taxi service. Except it launched with just 30 units, barely enough to service Yaba, the tech hub of Lagos.

Possible EVS has “plans to expand to at least 20,000 electric taxis across major Nigerian cities by 2028.”

What needs to happen

While these are major strides, especially for a country like Nigeria that doesn’t have constant electricity, for a well-developed technology sector that is self-sustaining enough to become a player in the global EV industry, there are still many policies that the government must implement to get there.

At the top of the chain of hurdles is the finances to see the project through. After this, Nigeria needs research centres run by people who are looking to challenge and can challenge the status quo. It also needs the manpower to see the project through better EV technology, clearly defined standard and safety rules, and a thriving production manufacturing and assembling of EV institutions producing batteries and parts.

“The current automotive policy has not adequately addressed EV issues and that is the reason NADDC is putting together a national policy on Vehicle Electrification (EV Policy). The new policy when it is operational will address most issues if not all relating to EV development in Nigeria,” Osanipin said.

Source: Technext


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