Beyond Petrol: Why investors are watching Nigeria’s emerging EV market

A new industry is fast emerging in Nigeria and the rest of Africa. It is the rise in the number of electric vehicles that is seen as becoming a major economic ecosystem beyond transportation.

The gradual emergence of EVs market in Africa is creating an entirely new investment ecosystem in mobility, energy, logistics, and infrastructure.

Just as the arrival of GSM in 2001 revolutionised the telecommunications sector and sparked a wave of ancillary services in Nigeria, the emerging EV industry is now attracting investors, with some actively positioning themselves to seize the growing investment opportunities within the ecosystem.

For Nigeria and the rest of Africa, it is not just to see it emerge but they are converting the opportunities created by shifting from fossil fuel vehicles to electric vehicles into concrete gains for employment and business opportunities.

Analysts note that Electric mobility whether vehicles, tricycles and bikes are indeed gradually but steadily gaining traction in Nigeria and the rest of Africa.

What African consumers need to know through credible media platforms is where to buy electric vehicle, how to charge it, how long does it take to charge and locations where to charge it.

Mid April, this year, the Government of Rwanda directed public institutions to ensure that 30 per cent of all vehicles procured are fully electric, as part of efforts to reduce reliance on petroleum products. Ethiopia, according reports, leads the African continent with an impressive 62% of new car sales being electric, “largely due to national bans on internal combustion engine”.

Africa’s EV market continues to experience significant expansion as B2B and passenger vehicle deliveries accelerate across the continent, according to Al Jazera, as quoted.

In Nigeria, it is estimated that there are about 15,000 to 20,000 electric vehicles (EVs) on Nigerian roads, representing 0.5% to 1% of the total vehicle population in the country, according to a study by Climate Scorecard, an organisation that reports on climate change policies across the globe. It said this is a marked increase from 5,000 EVs five years ago.

The number of e-mobility is heavily skewed toward two distinct categories – Privately owned which remains a distinct minority and Corporate/Ride-hailing fleets.

Based on insight on continuous adoption of EVs in Nigeria, Imran Oladimeji Hamzat, Executive Chairman/Managing Director of LUG West Africa, a company already investing in EV charging infrastructure calculates that in four years, electric vehicles could account for about 8- 10 per cent of vehicles on Nigerian roads.

He explained that Nigeria currently has over 11 million vehicles, and an 8 per cent adoption rate would translate to approximately 850,000 electric vehicles, creating a strong demand for public charging infrastructure. He added that not all EV owners would be able to charge their vehicles at home, making roadside charging points essential to prevent vehicle breakdowns and ensure smooth mobility.

To position for the market, Hamzat plans to expand his firm’s charging infrastructure by installing more charging points across Lagos State. Other investors are studying the market.

The transition will not be driven by environmental altruism alone; it will be pushed forward by structural economic shifts and policy changes, according to experts.

Bankole Oluruntoba, CEO, Nigeria Climate Innovation Center (NCIC) agreed that there will be rise on EVs in Nigeria and the rest of Africa which he premised on fuel subsidy removal and operational economics.

According to him, the elimination of the petrol subsidy has permanently altered the cost landscape. He said with PMS (petrol) prices hovering at high levels, commercial transporters face daily fuel costs that threaten their survival. “Operators switching to electric two-wheelers and commercial fleets are reporting 50% to 70% savings in running costs. In a high-inflation environment, this massive operational margin is the single strongest incentive for mass migration”.

The second reason is establishment of local assembly and policy de-risking. Oluruntoba said the introduction of the Electric Vehicle Transition and Green Mobility Bill has provided a massive boost to regulatory confidence. “Fiscal incentives—such as a reduced 10% import duty on fully built EVs, VAT waivers, and pioneer tax holidays—are attracting serious private capital. Crucially, domestic assemblers are scaling localized production lines. Local assembly brings down the initial capital expenditure and solves the historical bottleneck of spare parts and technical after-sales support”.

Already, some companies dealing on EV are assembling in Nigeria to meet local needs. Some of them in SAGLEV, assembled in Ikorodu, Lagos; Hyundai Kona EV; Innoson Vehicle Manufacturing (IVM): Nigeria’s major indigenous automaker based in Nnewi, Anambra State, has rolled out its own locally produced electric vehicles; NEV Motors; EMVC (Electric Motor Vehicle Company).

The expected increase on the number of EVs by about 850,000 will cost Nigerians about N34 trillion in four years which reflects the growing interest among Nigerians and companies for alternatives to petrol and diesel-powered automobiles. It is calculated that average price of electric vehicle is about N40m-N50 m

Due to the removal of fuel subsidy in 2023 and the persistent volatility in global crude oil prices, Nigerians have been coughing out over N1.300 in fuel price per litre which strains their incomes. Businesses, ride-hailing operations and individuals are steadily adopting EVs across major cities such as Lagos, Abuja, Port Harcourt and Kano.

Banks, telecoms and companies in other sectors are acquiring EVs both for compliance to clean energy and fuel reasons.

In addition to economics of charging infrastructure, the EVs presents opportunity for spare parts and maintenance market and battery sales.

Dennis Chuah, President of Electric Vehicle Association of Malaysia told BusinessDay recently that “the EV sector opens new pathways for young talent in engineering, energy systems, and digital mobility” and assisting them to develop local capability.

Chuah said that “EV is not just a transport solution, it is an industrial opportunity.” He agrees that EV industry will a create jobs in the establishment of assembly plants, battery systems, building charging infrastructure and maintenance and services

“EV is not about the future; it is about solving today ’s fuel problem”, he said.