This article was contributed to TechCabal by Uche Aniche.

Nigeria plans to replace 40% of all cars on its roads with Electric Vehicles (EV) by 2033, 10% less than the initial 50% target for 2031. The government also expects all these cars to be manufactured or assembled locally.

On the other hand, the Indian government plans to seek firm commitments from companies interested in accessing the Indian market to first establish a supplier ecosystem and source approximately 20% of parts locally within the first two years, which will eventually increase to 40% by the fourth year. They will in turn waive import duty down to about 15% provided the manufacturer will build from India. To hedge against possible defaults, the companies must provide bank guarantees covering the amount of import duty waiver they would enjoy. 

Stakeholders believe India’s planned policy demonstrates what smart and responsible policy development should look like and reflects the quality of mindset of the leadership but more importantly, captures political accountability to a very woke electorate.

The Economics Survey 2023 predicts that India’s EV market will grow with a CAGR of 49% between 2022 and 2030, with 10 million annual sales by 2030.

India has already made firm commitments to reduce the carbon intensity of its economy by at least 45% by 2030 compared to 2005 levels and achieve the target of net zero by 2070.

This policy ensured they maximise the value of this commitment while not exposing their local economy to global forces. Some of the expected impact of this Policy on the Indian economy includes:

The further strengthening of India’s economy and the continuing growth of what is already a very strong middle class that can afford Tesla and other EVs.

The policy will support the Indian government’s goal by contributing 10 million of the 17 million direct jobs from the Make In India Program while adding 50 million indirect jobs and propelling India’s goal to become a $10 trillion economy by 2035. 

More wealth will be created through this program as India achieves its goal of becoming a hub for EV manufacturing in competition with China. 

The Nigerian EV policy rock chair

Nigeria currently has a combined and installed manufacturing capacity of 313,150 vehicles but only a dismal 90,550 actual production per annum. 

With Nigeria’s EV market projected to grow at a compound annual growth rate (CAGR) of 57.9% in six years (2024 to 2030), the country could learn some lessons from India’s policy.

Nigeria has some active EV-related manufacturing and assembly companies. They include Hyundai Konak EV, Jet Motors, ReviveEarth (Enugu-based EV retrofitting startup), Osquareteck (providing energy storage as a service and gridless power system for EVs), Volta EV (Lagos-based), Quadcycle Automobile (Abuja-based), and a recent entrant, Egoras. 

Based in Port Harcourt, Egoras brings a new dimension to the EV conversation by leveraging blockchain technology both for the vehicles and the charging stations – according to Harry Ugorji, the Company’s CEO. Egoras plans to open the pre-order at an event scheduled for Port Harcourt in early April while deliveries will begin in October. 

Nigeria’s changing EV goals

Nigeria has developed and adopted twice, the National Automotive Design Plan with the goals changing on each occasion. The first approved plan in December 2021, according to Jelani Aliyu, the Director General of the National Automotive Design and Development Council (NADDC), targeted 50% locally produced EVs by 2031. 

However, the latest approved plan as per a statement by Otunba Adeniyi Adebayo, Nigeria’s trade minister, targets 30% locally produced EVs and one million jobs by 2033. 

Here are a few things we could learn: 

FDI is a two-way street: Companies will invest where they find value and not because they like your face. Energise local businesses and cut smart deals that protect and help them thrive.

Amplify and play to your strengths: If you amplify and play to your strengths, you will dictate the terms. Unlike India, Nigeria’s recent economic challenges mean a shrinking middle class. However, Nigeria boasts of a large deposit of Lithium—a very important component of EV batteries. Lithium is currently mined in Nassarawa, Kogi, Kwara, Ekiti, and Cross River States.

Nigeria needs to signal its intentions with bold visions: Economics will respond to bold visions, competent people, and passionate executors, not whimpers. The president should appoint competent and passionate people to drive the automotive policies. Targeting one million jobs from EV seems very understated and doesn’t seem to have captured the entire value chain. For instance, modern cars are software driven and EVs are no exceptions. Producing EVs locally will create many jobs for Nigeria’s software engineering ecosystem as well.

Nigeria can become a powerful hub and net exporter of EVs in Sub-Saharan Africa if the right vision, policies, and drivers are in place. 

Uche Aniche is a Startup Coach and Policy Advocate. He is a General Partner at Rebel Seed Capital, a Secondary Cities-focused early VC Firm, the Convener of #StartupSouth, and the Communications Director at Imo Economic Summit Group (IESG).