The Economics of driving an Electric Vehicle in Nigeria

Interest in driving Electric vehicles (EV) has surged over the years despite doubts about whether it is viable for the Nigerian market especially due to electricity supply challenges and terrible road networks.

Infrastructure challenges or not, it appears there is a sizeable number of electric vehicle owners in Nigeria boasting of the likes of Tesla and Hyundai Kona electric models in their car lots. But how much does it cost to own one?

Not your ordinary price

Subject to market forces, a Tesla S model price ranges from N32 million to N62 million if you were paying in Naira.

  • A Tesla X model price ranges from N36 million to N60 million.
  • A Tesla Y model price ranges from N20 million to N30 million.
  • A Hyundai Kona electric vehicle’s price ranges from N24 million to N30 million.

The affordability of these electric vehicles may be steep for most Nigerians, however, it is a small price to pay for the level of convenience owners of the car say they enjoy. For example, they do not have to worry about visiting fuel stations, dealing with local mechanics or worrying about the challenges of combustion engines.

A user’s experience

Automotive designer and the Director General, National Automotive Design and Development Council (NADDC), Jelani Aliyu who drives a Hyundai Kona in Abuja, told NewsTimes that electric vehicles are smoother rides than conventional vehicles.

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  • “When I drive my electric vehicle, I don’t have to make stops to fill up my tank, I only need to charge when I get home. The car requires less maintenance than petrol-powered cars,” he says. We can take Jelani’s word for it given his experience with cars at the highest level, first as a designer for General Motors in the United States and lately, as head of a government agency responsible for the development of Nigeria’s homemade vehicles.
  • Another user who showed us around his Tesla car referenced the aesthetics of the car, the dashboard display and how well the car is integrated to some of the technology more accustomed to smartphones.
  • A user, who is not Nigerian but of Indian descent reveals he only drives the Tesla car on weekends and has his own self-built charging port, at his location in Lagos.

Lack of Charging Stations

Adequate charging infrastructure is currently lacking in the country as there are a few dedicated charging stations available.

  • If you do not have access to a dedicated charging station, you can set up a home charging system.
  • According to available information, the power demand of an EV is similar to what you use at home to charge an air conditioner or large refrigerator. When charging at home, a Tesla can charge to full capacity within 4 to 6 hours, while a Hyundai Kona car gets to full capacity within 9 hours, 35 minutes. A full charge of a Tesla car can cover distances as far as between 360km to 560km.
  • Based on 2022 specifications, a Tesla S model is powered by a 100-kWh battery, while a Tesla X model is powered by a 75kWh battery, and a Tesla Y model is powered by a 75-kWh battery.
  • Meanwhile, a fully charged Hyundai Kona electric car can run for up to 482 km and is powered by a 64.0 kWh battery.

The cost of charging an EV, especially in Nigeria is not as expensive as one might think. For example, a full charge that results in 100KWh of power can cost as much as N6,000 assuming N60/KWh in the higher band of electricity tariff. Battery specifications also determine how fast a charge can be. The slower it takes your battery to charge the more you are likely to pay as charging cost.

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EV’s slow growth in Nigeria

  • Nigeria’s electric vehicle market is growing, but not fast enough. For Nigeria to actively partake in the global electric vehicle market, the Nigerian government must partner with investors in the sector to fund infrastructure projects such as charging stations, stable power supply in charging stations, and maintenance facilities. To get a sense of how much investment is required for charging stations, the European Union currently has nearly 275,000 EV charging ports, according to data by the European Alternative Fuels Observatory, or around 62 charging points per 100,000 inhabitants.
  • The United States has roughly 37 ports on the same per-capita basis. The United States currently has a total of nearly 43,000 public EV charging stations and around 120,000 charging ports, according to U.S. Department of Energy data.

Although the examples above are drawn from advanced economies, African countries like South Africa, Kenya, Uganda and Morocco are recording growth in their EV charging stations.

Audi recently announced it introduced an additional 33 EV stations taking its total number to 70 charging stations.

Virgin industry

There are more than 300 EV charging companies globally, including nearly 100 in North America but none with a presence in  Nigeria.

  • According to the Reuters report, many are less than five years old and few are more than 10 years old. It tells that it is an emerging industry that Nigerians can latch on to.

Investors have poured more than $2 billion into EV charging startups, according to Pitchbook, with most of the funding flowing in the past five years, Reuters said.

“Corporate investors in EV charging startups come from a range of industries, including carmakers such as Toyota Motor Corp (7203.T) and Daimler AG (DAIGn.DE); oil and gas companies including Shell (RDSa.L), and Chevron Corp (CVX.N); tech companies such as Qualcomm Inc (QCOM.O) and eBay Inc (EBAY.O).”

Pros and cons of using a Tesla

Tesla electric vehicles are cool and beautiful by all standards. Tesla cars are easy to drive and the car sets your steering wheel, mirrors, car seats and automatically recognizes you when you are in the car. Tesla cars have a great navigation system and they are one of the safest cars to drive in the world.

However, Tesla cars are expensive and parts replacements are also quite costly and in Nigeria, there are not a lot of service centres for Tesla cars. Replacing a 20-inch rim Tesla tire costs N141,200 each at black market rates for September 12.

However, all brands of electric vehicles require less maintenance than regular vehicles. Electric vehicle batteries are designed to last for the expected lifetime of the vehicle. The associated electronics, batteries, and motors do not demand as much maintenance as petrol-powered cars. But EVs need servicing occasionally. Smile Autos, located in Lagos, is an electric vehicle servicing shop.

What you should know

The Nigerian government has signed a Memorandum of Understanding (MoU) with Israeli and Japanese companies to commence assembling and manufacturing of electric vehicles in Nigeria.

Innocent Chukwuma, the chairman, Innoson Motors said his company will venture into the electric vehicle business when Nigeria is ready. He referred to the availability of charging stations around the country, so EV users can gain unlimited access to charging infrastructure.

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