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Prospects for electric vehicle utilization in Nigeria

Introduction

Seeing electric cars on Nigerian roads might sound to you like a possibility in the distant future, but that may not be the case. In December 2021, I noticed a very different car during a morning run in Ikoyi Lagos before a capacity-building session on renewable energy and energy transition with some oil company executives. It was a red-coloured Tesla. Then I thought to myself, the future is indeed here.

Background

Electric Vehicles (EVs), as the name implies, are powered primarily via electricity stored in batteries. They can be two-wheelers (bikes), three-wheelers (tricycles or ‘Kekes’), four-wheelers (cars and SUVs) and even large trucks. The history of these battery-powered vehicles is complicated to pinpoint to one inventor or country. Instead, breakthroughs from the battery to the electric motor in the 1800s led to the first electric vehicle on the road. Around the world today, the use of electric vehicles is gaining popularity. Electric car sales have broken new records, with momentum expected to continue in different markets worldwide. Sales exceeded 10 million in 2022. The share of electric cars in total car sales has more than tripled in three years, from around 4% in 2020 to 14% in 2022. China leads in the production of EVs, and Tesla is the leading brand in global sales.

Analysis

For vehicle owners in Nigeria, now is the most expensive time to get around in one. The recent increase in the price of petrol, due to the subsidy removal, has caused an increase in the cost of both human and material transportation. Due to the high cost, many vehicle owners in Nigeria are curious about alternatives. Compressed Natural Gas (CNG), which is presumed to be cheaper than petrol, is one alternative that has become the talk of the town. Already, the government is taking steps to ensure CNG-powered buses are made available to alleviate the cost burden of public transportation. Private vehicle owners are also exploring the option of converting their vehicles to use CNG.

Read also: Nigeria must design legal and regulatory framework for electric vehicles to meet NDC targets – Part I

However, as the global price of petrol and gas is somewhat linked to the price of oil, an increase in the price of oil can lead to an increase in the price of petrol and gas. With more frequent climate-related disasters such as floods, forest fires, fogging, extreme heat, etc., there has been an increased demand for decarbonization, especially from the West. Investment in producing internal combustion engine (ICE) vehicles powered by diesel, petrol, or CNG-powered vehicles has been frowned upon. Although hydrogen-powered vehicles are viewed as one of the clean energy transportation options, electric vehicles (EVs) are gaining global recognition as a critical transportation option of the future. So why should you start thinking of getting an electric vehicle?

Electric vehicles are the key technology to decarbonize road transport. The transport sector accounts for more than 15% of global energy-related emissions. In the developed world, there has been exponential growth in the sale of electric vehicles, wider model availability, increased performance, and improved range. Sales in emerging and developing economies have not been exponential, mainly due to the low charging infrastructure and relatively high purchase price.

Electric vehicles are a viable alternative to petrol-powered or CNG-powered vehicles for private use in Nigeria. Although there is a lack of public electric vehicle charging stations, I recommend that all electric car owners install their own home charging wall box before they take delivery of their car. In developed countries, many electric car owners hardly utilize public charging stations that often as their home charging stations become their primary charging source. If you ask some people whether they are thinking of owning an electric car, a common concern they have is typically around the distance it can travel on a full charge. But come to think of it, how often do most drivers deplete from a full tank to empty for a petrol-powered car? Not every day. How often do we travel with our private cars on long-distance inter-state trips? Not every day, too. But you may ask, how affordable are electric cars over the long run? They might cost more to purchase in the first place than petrol-powered cars, but electric cars should reduce your running (fueling) costs after that. You must consider purchase and running costs before deciding if an EV is right for you.

Let us understand the cost comparison better by comparing the cost of owning an electric-powered car against a petrol-powered car. A Tesla model Y Long Range version, which on full charge can cover a range of about 500km, comes with an 80kWh battery capacity. The 2023 Model Y sells for about $47,000. With shipping and import duties, let us assume it costs $60,000 or about N60m in today’s economy. A 2023 Mercedes Benz E Class Sedan can cover the same range as the Tesla and comes with a 66-litre fuel tank. It costs about N60m. Let us assume both cars cost the same. The difference would then lie in the running costs. One evening in September, while I was passing along the Sterling Bank branch on Adeola Odeku Street in Victoria Island in Lagos, I couldn’t help but stop to notice the electric car charging station. The signpost stated that the cost of charging per kWh was N150. Hence, using this cost to charge our 80kWh Tesla, we would have to spend N12,000. For the Mercedes, at a petrol price of N650 per litre, we would have to spend about N43,000 to fill our 66-litre tank. This is almost four times the cost of running an electric car. The running cost savings can even be more if you charge your electric car from a solar-powered home charging point. Electric vehicles have other benefits: they are less environmentally harmful and do not cause carbon emissions. As an EV owner, you will also benefit from reduced maintenance bills as EVs have fewer moving parts than petrol-powered vehicles.

Import duty concessions would be necessary to grow the EV market in Nigeria. Government incentives can also be used to encourage the purchase of electric vehicles with a preference for locally assembled ones. Priority driving lanes and parking spaces can be accorded to CNG-powered cars and electric vehicles. Nigerians deserve alternatives to petrol-powered cars as running them is becoming increasingly expensive.

Conclusion

The future of land transportation is electric vehicles. But in Nigeria today, most of us hardly consider getting an electric vehicle. With the prevailing rise in the cost of fueling petrol-powered vehicles, electric vehicles are a viable alternative. More electric cars on our roads would improve our environment and bring us up to speed on global car technologies. Electric vehicles are now in Nigeria. So, are you now thinking of getting an electric vehicle?


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