All over the world, the shift to electronic vehicles is gaining traction as efforts to reduce emissions hit the top gear. Beyond the climate change actions, experts are also pointing out the numerous economic benefits of embracing EVs.
While the campaign is already getting to Nigeria with a few affluent Nigerians buying Tesla EVs, there are still concerns that the revolution may not gain ground in Nigeria because of the country’s perennial power challenge.
In this exclusive interview with Abubakar Ibrahim, BusinessDay’s energy analyst, Sam Faleye, the chief executive officer of SAGLEV Incorporated Electric Vehicle Company, delves into the economics of EVs and the company’s plans to start assembling electric vehicles in Nigeria this year. Excerpts:
Can you provide an overview of SAGLEV’s operations in Nigeria?
SAGLEV is an electric vehicle manufacturer and we’re a US company. Our principals manufacture vehicles in the US, but SAGLEV Electromobility Nigeria Limited is our Nigerian subsidiary, just like we have subsidiaries in Ghana, Cote d’Ivoire, and South Africa. The plan is to make sure we assemble in each of these markets and priotise having assembly plants in each of these countries.
What we’re doing in Nigeria so far is, we have been testing vehicles in Nigeria and Ghana. We’ve been collecting data from rideshare drivers and fleet drivers to know how much they make, spend on petrol, and their mileage per day. So, the research and data collection part has been going on for probably a year and a half. But we are at this point, developing an assembly plant in Nigeria, there is also an assembly plant in development for Accra, Ghana.
In Nigeria, we initially planned to build one from scratch, which was to be at Ibeju-Lekki but because of the way the fuel subsidy was removed, we had to fast-track our plant and get an assembly plant facility that we could get online as quickly as possible.
We are already meeting with fleet developers, fleet partners, and dealers. So, we are generating some interest people are already pre-ordering and people are committing to deposits, so, this is coming to fruition slowly.
The target is to start assembling these vehicles in Ikorodu, Lagos in January and we are already training and recruiting electric vehicle technicians. We just hired 18 of them. They are getting ready to start their online training, then they will go to the classroom and go to practical training.
What are the key challenges and opportunities you face operating in the Nigerian EV market?
The way I like to look at challenges is to see opportunities. You have to have a balance in your mind, otherwise, you could get discouraged. The challenge is interesting because an average Nigerian has experienced a lot of trauma relating to electricity but that has not been our experience. So, power could be a challenge. But power is very much a perceived problem because it is not the problem that people think it is.
The other challenge we’ve had is that this is just a new product. 90 percent of what our company does is to educate people because so many people don’t even understand that they’re perfect electric vehicle customers.
Also, we have to train all our staff, especially the technical staff. You have the business development, accounting, and even the engineers that design. At least we have some of those technicians and assemblers but we don’t have those quantities, but that is being worked on. So, I have to give the government some credit for those strategic things.
Some of the other challenges are just the charging network, even though we are an automotive manufacturer, we have to reluctantly get involved in developing charging points, it’s just like being any automotive manufacturer, and all of a sudden you find yourself developing gas stations. So that’s a challenge and another challenge is just the economy and the foreign exchange rate. We find ourselves in a challenging economic condition but the way I like to tell people is that SAGLEV is a solution to that.
So, the fact that we understand that we bring in factors that actually help you to manage to maneuver around the economy is very encouraging to us. So, the challenges are there but some of those are some of the main challenges.
How do you ensure the quality and reliability of SAGLEV EVs?
First of all, I would like to quickly mention that we are committed to producing and supplying the same products that you see in Europe, Asia, and all over the world. In this market, that is our minimum, then we want to make sure that these vehicles are configured for our special circumstances; our road and weather.
The next thing is to make sure the engineering aspect function at excellent capacity.
Another thing is just to make sure we have the proper warranty. As far as quality is concerned, these are the different avenues that we are going to maintain quality. So, this was a big issue on our minds because we knew that we didn’t want to come to this market and have electric vehicles fail. These are the things among others that we’re doing about quality.
What steps is SAGLEV taking to expand its production capacity and meet growing demand?
That is a very complex question. But the first thing I want to tell you is that SAGLEV wants other people to manufacture electric vehicles in Nigeria. If you can invest in EV manufacturing, we don’t mind you coming on board, this is a country of over 200 million. SAGLEV is not going to satisfy that market, I can assure you of that. We just want to make sure that people get the benefits of electric vehicles and it’s not just in personal vehicles, all the way to last-mile transportation, even trucking, public transportation, etc., because you want to attack the highest offender, which is public and mass transportation.
So having said that, our initial facility has a minimum starting manufacturing capacity of 2500 annually. Our factory in Nigeria was designed about two and a half times the size of the one in Ghana. Well, population-wise, it makes sense but that is only in one shift. If we went to two shifts, we can go anywhere now towards 10,000, because there’s the mass effect. so that is even the minimum and we also have to ramp up slowly.
How does SAGLEV plan to address potential infrastructure challenges such as charging stations and grid capacity?
As you know, we can’t sell EVs if the charging infrastructure is not ready. So why do we reluctantly get into charging, we’re an electric vehicle manufacturer, and we don’t have a choice.
We’ve started looking for people that have this commonality of thought and we came across some of the people in the downstream sector. We have a Memorandum of Understanding, which was publicised and signed with Ardova through its Renewables subsidiary.
Ardova owns Enyo and they have a lot of big plans to go into charging, the company already has real estate. You can imagine where Ardova and Enyo gas stations now have EV charging. So we’re collaborating closely with them, it is a strategic and symbiotic relationship because think about it, we want chargers out there so people can buy EVs and Ardova wants EVs so that people can charge. Some other downstream companies are also involved.
How can EVs help Nigeria achieve its sustainability goals and reduce reliance on fossil fuels?
I will suggest we start the solution process by focusing on areas where we are the biggest offender which is mass transportation. Very soon the private buyers will catch up with us. Shareride drivers will also start understanding that they should be using EVs but you go for the biggest offenders, public and mass transportation, leading to improvements in carbon emission and climate change.
So, this is just inbuilt; the nature of an EV is sustainability. It will cut Nigeria’s carbon emissions and help drive the country’s net zero target.
What are the factors that make Nigeria a viable market for EV adoption?
First of all, we have the numbers. So, we have use for EVs, especially in last mile distribution. This is why the increase in oil prices hit us so hard. Yes, that is a huge factor. We have the numbers to make the EV ecosystem work.
The government has a role in making it possible, tariffs encouraging, even training, which the government is doing. In fact, I was surprised the National Automotive Design and Development Council had an electric vehicle training curriculum for years. It has nothing to do with SAGLEV. so that’s the quick answer there.
What are the government policies and incentives that support EV adoption in Nigeria?
On this one issue, the job of the government is to set policy. Now they have to go to the next step and find the policy they set but you have to understand that there is something called the National Automotive Industry Development policy that was just ratified.
The former vice president Yemi Osinbajo, and then it was ratified by the current vice president, this is the law of the land. There are incentives for manufacturing and assembling.