The Nigerian Senate has advanced a significant piece of legislation, approving the Electric Vehicle Transition and Green Mobility Bill for its second reading. This bill, championed by Senator Orji Uzor Kalu, aims to steer Nigeria towards a future powered by electric vehicles (EVs), a move that coincides with the current presidential efforts to promote the adoption of Compressed Natural Gas (CNG)-powered vehicles.
The core objective of the bill is to systematically replace fossil fuel-powered vehicles with eco-friendly electric alternatives in the shortest feasible timeframe. This transition is envisioned as a crucial step towards enhancing environmental sustainability and modernizing Nigeria's automotive and energy sectors.
To facilitate this shift, the proposed legislation outlines a framework designed to stimulate local EV manufacturing, positioning Nigeria as a significant player in Africa's electric vehicle industry. The bill also introduces a range of incentives for EV importers, investors, and users, intended to attract both domestic and international capital into Nigeria's burgeoning EV market. These incentives are set to include tax holidays, import duty waivers, road tax reliefs, toll exemptions, and subsidies.
In a bid to bolster domestic production capabilities, the bill proposes stringent regulations for foreign EV manufacturers. These regulations will mandate partnerships with local EV assemblers and the establishment of local assembly plants within a three-year period. Furthermore, foreign manufacturers will be required to source at least 30% of their raw materials domestically.
The proposed law also includes substantial penalties for non-compliance. For example, unlicensed electric vehicle importers could face fines of up to ₦500 million, with their goods subject to confiscation.
Under the terms of the bill, each approved local electric vehicle manufacturer will be obligated to produce a minimum of 5,000 units annually, while also adhering to international safety and technical standards.
Electric Vehicle Transition Amidst CNG Conversion Drive
In August 2024, the Nigerian Federal Government officially launched its CNG conversion initiative, spearheaded by the Presidential CNG Initiative (PCNGI). The government's strategy is to ease the transition for Nigerians from using premium motor spirit (PMS) to vehicles powered by compressed natural gas (CNG).
"The strategic journey to powering Nigeria’s transportation sector with a clean energy source has begun in earnest and no stone will be left unturned to make its adoption as easy as possible."
Ride-hailing drivers are identified as primary targets for this initiative. Conversations with drivers at the time revealed that vehicle fueling costs are among the two most significant daily factors impacting their earnings, with vehicle maintenance costs being the other.
While acknowledging that EVs could potentially eliminate these costs, many drivers expressed skepticism about adopting the technology.
"We are sceptical about EVs because of the maintenance and durability of the batteries. We are used to handling gasoline vehicles but EVs will be new technology which many drivers will have to get accustomed to and that’s a learning curve there."
Despite current reservations, drivers anticipate that EV adoption will eventually occur, though not rapidly or universally.
"How many would be willing to accept the learning challenge? Only a few, at first! Then, if there’s a semblance of success, more can adopt. So, don’t expect a quick adoption of the EVs. Moreover, there are a few drivers amongst us that use hybrid (gasoline & electric) and it’s been mixed tales which isn’t boosting the morale of drivers."
It is hoped that the concerns of drivers and public transporters will be addressed by the new Electric Vehicle Transition and Green Mobility Bill.