At #1160 per liter, there is high consideration for electric vehicles

In May 2023, President Bola Tinubu of Nigeria announced the end of the petrol subsidy, leading to a substantial 200% increase in petrol prices from ₦198 to ₦500 and moving the attention of Nigerians to electric vehicles.

Subsequently, two months later, the fuel prices experienced an additional surge, rising by 23% to ₦617. Amidst these escalating costs, the country grapples with a 22% annual inflation rate, highlighting that the soaring petrol prices are just one facet of the multifaceted challenges faced by Nigerians.

While electric vehicles (EVs) present a less painful option by eliminating petrol costs, they come with a higher price tag. The least expensive Tesla model, the Model 3 Standard Range, is priced at $35,000 (₦27.7 million), making affordability a significant hurdle. According to InsideEVs, the only electric vehicles available below $20,000 are used ones.

However, the challenges with EVs in Nigeria extend beyond their cost. Tolu Williams, the founder of the Nigerian EV company Siltech, succinctly outlines the reservations Nigerians harbor regarding EV adoption. Concerns range from potential issues such as running out of battery power on highways to challenges related to accessing electricity for charging and the repairability and maintenance of these vehicles.

Electric Vehicles as an Alternative Means of Transportation

In contrast to their foreign counterparts, Nigerian electric vehicle (EV) manufacturers seem attuned to the distinctive circumstances of car owners in the country, considering factors such as road conditions and local preferences. While affordability and suitability for Nigerian roads are paramount, Siltech, under the guidance of William, addresses these concerns by producing various electric bikes, including power bikes and off-road types. Notably, Siltech recommends its 65% made-in-Nigeria three-wheeler, the Falcon, retailing between ₦650,000 ($837) and ₦700,000 ($900).

The Issues with Electric Vehicle in Nigeria

Williams emphasizes the expense associated with EVs, attributing a significant portion to the battery, which constitutes 55% to 60% of an EV’s core components. Even an electric bicycle meeting standards for safe commuting can exceed $1,000 (which is a lot more expensive even though it eliminates the need for fuel and its soaring prices). To combat high production costs, Siltech’s decision to assemble EVs in Nigeria results in a noteworthy 55% reduction, depending on the scale of production.

The Falcon, with a range of 300 km, offers practical context; it could cover the distance from Ikeja, Lagos, to Osun State, which is approximately 199 km away.

Electric Vehicle: Tesla and The Falcon

In contrast to Tesla, which necessitates a ₦1.6 million level two or three charger for a full battery charge within 30 minutes to 3 hours, the Falcon offers a simpler charging process akin to charging a mobile phone. Williams estimates the charging time for the Falcon to be approximately two hours. This efficiency is attributed to the Falcon’s utilization of a notably smaller battery, eliminating the need for high-tech chargers. Additionally, the Falcon employs pioneering battery swap technology, enabling users to obtain a fully charged battery in about a minute.

Fueling a car that would run for 2 hours would take around 4 liters of fuel and would cost approximately NGN4,640 at NGN1160 per liter At the time of writing this piece, we are not sure what it would cost to fully charge an electric vehicle that would run for the same amount of time, and we are hoping the price would be less.

The swifter charging time of the Falcon in comparison to Tesla is a direct outcome of its smaller battery size and innovative battery swap technology.

The Issue of the Cost of Electric Vehicles in comparison to Rising Fuel Prices to Fuel Cars

When questioning individuals about their willingness to invest ₦700,000 in a three-wheeler to forsake traditional petrol usage, safety apprehensions were predominant. A common concern revolved around the impact of rain on the vehicle. Notably, the Falcon addresses these worries with an IP67 rating, signifying its resilience to rain and even submersion in water. To specifically address rain-related concerns, Williams highlights the Falcon’s design feature: a detachable roof.

Navigating Nigeria’s EV Landscape

Williams contends that crafting a Tesla-level electric vehicle (EV) would be financially demanding, especially with emerging government support. Therefore, he sees three-wheelers as an ideal entry point for Nigeria. It’s crucial to note that their target demographic is not commercial motorcyclists; instead, they aim to provide an affordable and secure mode of transportation for average Nigerians. Williams emphasizes the appeal of three-wheelers, citing their self-balancing nature and ease of use as key factors that resonate with the preferences of many individuals.

Jet Motors, although not focused on personal-use vehicles, underscores the pivotal role of batteries in influencing the cost of electric vehicles (EVs) as opposed to petrol-powered cars. Jet Motors prices the regular Jet Mover at ₦27 million ($33,000) and the EV variant at ₦42 million ($52,546). Wemimo Osanipin, Jet Motors CEO, states that a ₦20 million EV likely has a ₦10 million battery cost.

Unlike Siltech’s three-wheelers, Jet Motors employs larger batteries, potentially surpassing even Tesla’s, yet Williams points out the scarcity of suitable chargers for these kinds of EVs in Nigeria.

Osanipin asserts that where there is a will, there is a way, expressing optimism about the potential for charging stations with increased demand. However, the question remains: is there a viable EV space in Nigeria? Osanipin identifies four key players needed for progress: manufacturers, investors in charging stations, investors in power infrastructure for charging stations, and EV distributors. The challenge is their reluctance to engage without a thriving EV market.

Williams proposes a solution: local battery assembly to reduce EV prices. Osanipin, on the other hand, advocates for government investment in lithium exploration, citing lithium’s significance in battery production and its substantial contribution to EV costs.

While Tesla expressed interest in lithium exploration in Nigeria in 2021, negotiations faltered as they intended to manufacture batteries abroad. The government’s expectation for foreign companies to drive the EV industry is evident, with the National Automotive Design and Development Council (NADDC) recently acquiring Jet EVs. This move, along with collaboration with Jet Motors to formulate a national plan for EV development, signifies the government’s commitment to investing in Nigeria’s EV sector.

The Electric Scooter

In the current landscape, where riding the Falcon might evoke fear or owning a Jet EV may be financially out of reach, there remains a final option: the electric scooter.

Note that this solution caters specifically to a certain demographic, like students or individuals commuting within small communities.

Despite its limitations, the electric scooter provides a viable alternative for those within these user groups.

Isaac Oyedokun, the Founder of Trekk, dispelled doubts about electric scooters replacing petrol for cars within closed communities, showcasing them as a viable solution.

The Trekk system is straightforward. Users simply download the Trekk app, locate a nearby scooter using the app, scan the QR code on the scooter, pay to unlock, and initiate their journey.

Recognize that this solution targets a specific demographic—students or individuals in small communities. Despite limitations, electric scooters serve as practical fuel-free alternatives for these user groups.

Frequently Asked Questions

Why are Nigerians considering electric vehicles (EVs) now?

With petrol prices soaring to ₦700 per liter, many Nigerians view EVs as a cost-effective alternative that eliminates fuel expenses, despite their higher initial costs.

What are the main challenges to EV adoption in Nigeria?

Key challenges include high purchase prices for EVs, limited charging infrastructure, and concerns about battery life and maintenance.

How does the cost of operating an EV compare to petrol vehicles?

While EVs have a higher upfront cost, their operational costs are lower since they do not require petrol, potentially making them more economical over time.

What government support exists for EV adoption in Nigeria?

The Nigerian government has implemented policies like import duty exemptions for EVs and aims for 30% of vehicles on the road to be electric by 2025, promoting a shift towards cleaner energy sources.