Will Nigeria's higher petrol prices boost EV switch?

As petrol prices skyrocket in Nigeria, more and more Nigerians are exploring alternative sustainable options such as Compressed Natural Gas and electric-powered vehicles. The shift away from Internal Combustion Engine vehicles has been primarily driven by recent petrol price shocks, prompting significant interest in electric vehicles (EVs) in the country. Sam Faleye, the Founder of Saglev Electric Vehicle Company, sheds light on the cost and maintenance metrics of EVs and the overall market appetite. In a recent interview on CNBC Africa, Faleye highlighted the cost comparison between brand-new Internal Combustion Engine vehicles and EVs. Although the upfront cost of an Internal Combustion Engine vehicle in the same model range as an EV is approximately 25 percent less, the maintenance costs for Internal Combustion Engine vehicles are about 60 percent higher. This cost disparity, coupled with the rising petrol prices, has spurred Nigerians to consider EVs as a viable and cost-effective alternative. Faleye acknowledged the significant shift towards sustainable energy sources in various sectors, attributing it to a rise in demand for solar power. He emphasized that the dynamics in the electric vehicle market mirror those of the solar industry, where increased costs have fueled the demand for more sustainable alternatives. The adoption of EV technology within the automobile industry is rapidly evolving, leading to a change in aesthetics and driving preferences. Faleye noted that the transition towards EVs is not merely a trend but a strategic response to rising fuel costs and maintenance expenses associated with Internal Combustion Engine vehicles. He highlighted the economic benefits of EVs, citing that they have fewer moving parts (around 80 compared to over 2000 in Internal Combustion Engine vehicles) and lower maintenance costs, making them a more financially viable option for drivers. In the context of ride-hailing services and mass transit, Faleye underscored the cost-saving advantages of EVs for fleet operators and drivers. He revealed that EV users could save significantly on both charging and maintenance costs compared to their Internal Combustion Engine counterparts. For instance, a driver spending an average of 12,000 naira on a ride-hailing car could reduce their charging expenses to as low as 4,000 naira with an EV. Similarly, the maintenance costs for EVs are estimated to be 50 to 60 percent less than Internal Combustion Engine vehicles, making them a more attractive option for budget-conscious consumers. Faleye addressed concerns about the infrastructure needed to support EV adoption in Nigeria, emphasizing that 80% of EV drivers worldwide charge their vehicles at home. He also highlighted the efforts of Saglev Electric Vehicle Company to provide charging stations for ride-hailing drivers without access to home charging facilities. With innovative solutions like a charging plant with 50 chargers and a ride-hailing model with a range of 350 kilometers on a four-hour charge, Faleye reassured consumers about the feasibility of integrating EVs into their daily lives. Looking ahead, Faleye shared his company's expansion plans, including an installed capacity to produce 2,500 cars per annum, with the potential to scale up to 10,000 cars annually. He also discussed the micro-factory strategy to establish production facilities in other African countries, enhancing regional accessibility to EVs. As Nigeria navigates a transition towards sustainable mobility solutions, the cost-effective and eco-friendly nature of electric vehicles is poised to reshape the country's automotive landscape, driving towards a cleaner and more sustainable future.