Yemi Olakitan
The transition to electric vehicles (EVs) in Nigeria and other African countries has gained momentous attention in recent years, especially after the launch of the first made-in-Nigeria EV, the Hyundai Kona, by Stallion Motors in 2021.
EVs are vehicles that run on electricity instead of fossil fuels, and they have the potential to reduce greenhouse gas emissions, improve air quality, and lower fuel costs. However, many challenges and barriers hinder the adoption and deployment of EVs in Nigeria, such as High upfront cost: EVs are generally more expensive than conventional vehicles, and most Nigerians cannot afford them without financial incentives or subsidies.
Lack of infrastructure and technical know-how: Nigeria lacks adequate public charging stations, reliable electricity supply, and skilled mechanics for EV maintenance and repair.
The political entrenchment of oil and gas: Nigeria is heavily dependent on oil revenues, and the transition to EVs could threaten the economic and political interests of the oil and gas sector. Low consumer awareness and acceptance: Many Nigerians are not familiar with the benefits and features of EVs, and they may have concerns about their performance, safety, and durability³.
Despite these challenges, some Nigerian startups and companies are working to promote and expand the use of EVs in the country.
For example, Metro Africa Xpress (MAX), a mobility platform backed by private-equity firm Lightrock, is looking to deploy EVs in about eight African countries including Nigeria, Egypt, Cameroon, and Uganda. MAX aims to have a fleet of 100,000 EVs by next year and to achieve 100% electrification in the next 10 to 15 years.
MAX also partners with vehicle producers, ride-hailing platforms, and financial services firms to provide EVs to drivers and customers.
Another example is Jet Motor Company, a Nigerian automaker that produces the JET EV, a locally assembled electric pickup truck that can run on solar power The JET EV has a range of 300 kilometres on a single charge and can be charged in four hours using a standard outlet or in one hour using a fast charger. The company also plans to build solar-powered charging stations across the country and export its vehicles to other African markets.
These initiatives show that there is a future for EVs in Nigeria, but it will require concerted efforts from various stakeholders, such as the government, the private sector, civil society, and the consumers, to overcome the existing challenges and create an enabling environment for EV adoption and deployment. Some of the possible actions that could facilitate this process are:
Developing and implementing a national EV policy and roadmap that provides clear targets, incentives, regulations, and standards for EV development and deployment.
Investing in and expanding the electricity grid and renewable energy sources to ensure reliable and affordable power supply for EV charging
Building and maintaining public and private charging infrastructure across the country, and ensuring interoperability and accessibility for EV users
Providing financial and non-financial incentives, such as tax breaks, subsidies, loans, grants, rebates, and preferential parking, for EV manufacturers, dealers, and buyers.
Enhancing the capacity and skills of local mechanics, technicians, and engineers for EV production, maintenance, and repair. Raising awareness and education among the public and the media about the benefits and features of EVs, and addressing the myths and misconceptions that may hinder their acceptance and adoption
By taking these actions, Nigeria can accelerate its transition to a low-carbon and sustainable mobility system, and reap the economic, social, and environmental benefits of EVs.
Several African governments are also introducing tax cuts and other incentives to boost the e-mobility industry and drive the demand for eco-friendly vehicles.
Tunisia has become the latest country to introduce e-mobility incentives as governments across Africa bet on tax breaks and other incentives to increase the roll-out of electric vehicles.
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The country’s Finance Act 2023, which came into effect on 1 January, states that “customs duties on electric vehicle charging equipment have been reduced to 10% and the value-added tax (VAT) has been reduced to 7%.”
The Tunisian Ministry of Environment projects these incentives will result in the deployment of 50,000 electric cars by 2025. “This is likely to lead to a reduction in oil consumption of 5.9 million barrels or a reduction in imports of fossil fuels of US$660 million over the period 2020-2030,” the Ministry said in a statement.
Currently, French oil marketer, TotalEnergies is installing the first network of recharging electric vehicles in 19 service stations in Tunisia. At the same time, German-Tunisian start-up Bako Motors plans to deploy locally-made tricycles and electric bicycles in 2023.
South Africa is also mulling tax incentives and pumping billions of dollars into green energy and e-mobility industries, with a focus on saving its auto exports. Both the UK and Europe – its key markets – have announced a shift to green energy-powered vehicles.
The UK Government said it will introduce a zero-emission vehicle mandate setting targets requiring a percentage of manufacturers’ new cars and van sales to be zero emissions rated, each year from 2024.
Similarly, the European Commission is implementing various regulations to lower emissions from motor vehicles by 55% by 2030 and reach a zero emissions target by 2035.
This means that sales of petrol and diesel motor vehicles will be scaled down and eventually banned in the UK and EU, a move that could jeopardise South Africa’s motor industry.
During the 111th anniversary celebrations of the Africa National Congress, South African President Cyril Ramaphosa said South Africa would develop the productive capacity to participate in global green energy value chains, including green hydrogen production and electric vehicles.
“The ANC directs the government to expand incentives to the electric vehicle manufacturing industry to accelerate the transition from the internal combustion engine in our country’s manufacturing sector,” said Ramaphosa.
In May 2021, South Africa’s Department of Transport introduced a new driving tax – the traffic-management levy – that hikes taxes for drivers using petrol and diesel-powered vehicles. Legal experts at the law firm, Cliffe Dekker Hofmeyr (CDH), said the measure would accelerate the shift to electric vehicles in the market.
South Africa will need to move faster to build local demand for – and supply of – affordable electric vehicles. Vehicle manufacturers, which currently produce internal combustion engine (ICE) vehicles for the country’s local market are already worried about their overseas markets.
“We don’t want our main export markets to say that they are no longer interested in ICEs because of their emission targets and that they are taking their business elsewhere. We need to remain relevant,” said Mike Mabasa, CEO of the National Association of Automobile Manufacturers of South Africa.
South Africa and Morocco are Africa’s largest vehicle manufacturers and exporters and both are heavily dependent on European markets. While Opel and Renault have both announced plans to produce electric cars in Morocco, other African nations are pushing e-mobility as an opportunity to build local vehicle manufacturing capacity and offer more environmentally friendly commuting options.
In April 2022, Rwanda unveiled a wide set of tax breaks to push the adoption of e-vehicles. The East African nation exempted electric cars, spare parts, batteries and charging station equipment from VAT, import and excise duties.
In March 2021, Egypt granted used passenger cars with electric or dual motors a 10% discount on the free-on-board (FOB; the value at the point of export) value, to expand the importation and use of electric vehicles. Further incentives have followed.
“The number of charging stations across the country is growing, and Egypt is anticipated to have its first domestically built electric vehicle in 2023. The government is incentivising customers to buy electric vehicles” said research firm Mordor Intelligence in a report on Africa’s electric vehicle market.
The Kenyan government had previously jumped ahead of its peers by halving the import duty for fully electric vehicles (from 20% to 10%) in 2019. Kenya has also seen state-owned firms – Kenya Power, an electricity distributor, and KenGen, a power generator – begin phasing out fossil fuel-powered vehicles in their fleets.
All these developments point to a rise in the number of electric vehicles on African roads and Mordor Intelligence projects that Africa’s electric vehicle market value will reach $21.39 billion by as early as 2027.
