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Manufacturers rev up electronic vehicles plans in Nigeria amid cost worries

Several companies are entering Nigeria’s electric vehicle industry, planning to assemble thousands of EVs locally, driven by the rising petrol prices and the government’s removal of fuel subsidies, making EVs an attractive alternative for Nigerians..

Yet, the affordability of brand-new EVs in the Nigerian market is a concern, especially when many Nigerians are accustomed to purchasing fairly used vehicles at lower prices.

However, proponents argue that EVs offer lower total ownership costs due to reduced maintenance requirements, making them a more cost-effective option over time, and creative solutions such as government subsidies on parts and financial sector support can help lower the acquisition cost, making EVs more accessible to Nigerians.

More players are springing into Nigeria’s electronic vehicles industry with plans to roll out thousands of locally assembled electric vehicles in the country starting next year even as concerns mount over the affordability of such vehicles to average Nigerians.

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Driven by high optimism that the hike in the price of petrol and the government’s insistence that there is no more fuel subsidy, are enough motivation for Nigerians to embrace electronic vehicles, the EV manufacturers are planning big for the market.

For them, it is time for every Nigerian to start considering an EV as their next vehicle given the current price of fuel and the volatility that may keep the price going higher.

Ambitious plans

One of the EV manufacturers, SAGLEV, said its 5000sqm Assembly Plant located in Ikorodu Lagos which is expected to begin production in December 2023, will be assembling 2,500 electric vehicles annually on one shift and the plan is to increase it to 2 shifts to produce 5,000 annually.

Similarly, another mobility company with its plant located in Abuja, Possible Electric Vehicle Solution (Possible EVS), said its manufacturing plant, when fully operational, will produce up to 10,000 electric vehicles yearly—including minibuses, tricycles, pick-ups, and taxis—at its initial phase.

Earlier, another EV Manufacturer with a plant in Enugu, Roxettes Motors, said its plan is to become Nigeria nay Africa’s Tesla equivalent, and with the full deployment of technology tools in the production process, will match Tesla EVs in the nearest future.

The company said its plant will be producing compact and subcompact cars, midsize sedans, SUVs, Buses, large Trucks, and luxury cars, for a wide range of clientele not only in Nigeria but all across Africa.

The driving factors

While there are now many companies interested in producing EVs in Nigeria, one major factor has been the driving force according to a Director of PDX Innovation Hub, Mr. Gbenga Owolabi. This factor, which he believes will also attract more players to the industry, is the removal of fuel subsidy.

According to him, with cheap fuel, no Nigerian would consider EVs, but with the removal of subsidy and fuel now selling at over N600, the EV makers are seeing an opportunity to present cheaper alternatives to Nigerians.

Speaking with Nairametrics, Owoloabi who is a consultant in the EV ecosystem in Nigeria said with fuel subsidy removal, the uncertainties in the global market and the value of the naira would continue to drive petrol prices in Nigeria.

“There are two factors that will continue to affect the price of fuel. One is the value of the naira and two is the rising global crises. First, it was Ukraine-Russai and now we are seeing the Israel-Hamas war. These conflicts continue to push up the price of crude oil and the landing cost of petroleum will continue to increase and since there is no more subsidy, Nigerians will have to bear the costs.

“Those uncertainties and the vagaries of petrol prices will prompt transporters and corporates to go for electric vehicles. This is because with the current uncertainties, transporters cannot plan their fuel costs, and companies cannot budget their fuel costs. But with electric vehicles, it is a bit steadier. This is why many Nigerians will embrace EVs,” he said.

The Chief Executive Officer of SAGLEV, Mr. Gbenga Faleye, indeed corroborated Owolabi that removing the fuel subsidy motivated the company to fast-track its commencement of EVs production in Nigeria.

We started in Ghana and initially planned to set up our plant in Nigeria in Q3 2024. But with the fuel subsidy removal and the increase in the cost of petrol, we have to fast-track everything and that is why we are opening our factory this December,” Faleye said in an interview.

Ownership cost concern

While Faleye believes that EVs like SAGLEV’s sedan going for N18 to N20 million is quite affordable compared with say a brand new Toyota Corolla selling for about N37 to N40 million, the fact that the majority of Nigerians are used to fairly used vehicles at far cheaper prices, raises the question of affordability of brand new EVs in the Nigerian market.

However, Owolabi noted that EVs are way cheaper than Tokunbo cars if the costs of maintenance are factored in.

“EVs have less number of moving parts. Less moving parts means less maintenance. In the long run, the total cost of ownership, which is the acquisition cost and the maintenance and operational cost, is lower than an internal combustion engine vehicle. Even with the gas, CNG being proposed, you cannot compare it with electric vehicles because it is still liquid fuel. Electric Vehicle is a totally different kind of car entirely, so that gives you that advantage.

“Yes, I agree that the cost of acquisition may still be high for someone who has been buying Tokunbo cars, this is where creativity comes in. This is where government policies come in by introducing subsidies may be in terms of duties removal on parts. And then the financial sector will need to be creative in terms of providing financing. That will also help people to make the conversions happen and Nigerians are very smart people who are always looking for the lowest costs, they will definitely embrace EVs,” Owolabi said.
The beginning of the EVs revolution in Nigeria

In 2021, Nigeria launched the first locally assembled electric vehicle, Hyundai Kona, from the stable of Stallion Motors. This followed the unveiling of the pilot program by the National Automotive Industry Design and Development Council (NADDC) in partnership with the Stallion Group and other stakeholders to roll out 100 solar-powered electric vehicle charging stations across Nigeria.

The introduction of the Hyundai Kona opened a new vista of opportunities in the automotive industry as the world attempts to phase out petrol-powered vehicles in response to global climate change and concerted action against emissions.

However, two years later, EVs are still very few on Nigerian roads. But with the fuel subsidy removal and the planned mass production of EVs in Nigeria by manufacturers, the coming years may see a surge in EVs on Nigerian roads.

The emergence of many players in the EV assembling industry may also lead to the introduction of competitive prices…..CONTINUE.FULL.READING>>>

About the author

Bunady

JOLOWO BUNALAYEFA PIUS is the Chief Executive Officer (CEO) for BUNADY NEWSLITE GLOBAL ENTERPRISE (Bunady.com). He started his Blogging/Journalism career at God's Own Wireless Company 2012. He's a graduate of Adekunle Ajasin University Akungba Akoko Ondo State, with a major in History And International Studies. You can contact him for press events, advertisement promotions on Email: contact.bunady@gmail.com

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