The Federal Government has approved tax waivers for nearly 4,000 electric vehicles (EVs) imported into Nigeria during the first half of 2026, as the country intensifies efforts to promote cleaner transportation and unlock new business opportunities in the emerging electric mobility sector.
Government data reviewed by Reuters showed that the approvals represent the first batch processed under a new programme designed to encourage cleaner transportation through tax incentives while supporting local vehicle assembly.
The policy comes as Nigeria seeks to reduce its dependence on petrol and diesel-powered vehicles while facing persistent electricity shortages, inadequate charging infrastructure and rising operating costs for households and businesses.
Nigeria’s 2022 Energy Transition Plan targets electric vehicles accounting for 60 per cent of the country’s vehicle fleet by 2050. However, the transition remains at an early stage, with EVs estimated to represent less than one per cent of vehicles currently on Nigerian roads.
The Federal Government has introduced several fiscal measures to encourage EV adoption. In 2024, electric vehicles were exempted from value-added tax, while import duties on EVs were reduced from five per cent to zero this year.
The incentives could lower the cost of importing and selling electric vehicles while creating opportunities for businesses involved in vehicle distribution, maintenance, charging infrastructure, battery technology, renewable energy and related services.
However, unreliable electricity remains one of the biggest obstacles to Nigeria’s electric mobility ambitions.
The national grid supplies approximately 4,000 megawatts to a population of more than 200 million people, leaving households and businesses heavily dependent on petrol and diesel generators whenever grid power is unavailable.
The electricity challenge also affects businesses operating within the EV ecosystem. Charging stations, dealerships and battery-swapping companies increasingly rely on generators to maintain operations during power outages.
Bolanle Boboye, an executive at Saglev, an electric vehicle manufacturer affiliated with Chinese automaker Dongfeng, said Nigeria should pursue its energy and transportation transitions simultaneously rather than wait for the electricity sector to become fully reliable.
“If we wait for electricity to become perfect before adopting EVs, the rest of the world will leave us behind,” Boboye said.
He also argued that EVs could still provide environmental benefits even when their batteries are charged with electricity generated from diesel-powered sources because they can reduce overall emissions compared with conventional vehicles.
Nigeria’s charging infrastructure deficit remains substantial. A policy brief reviewed by Reuters estimated that the country had only about 48 public EV charging stations as of late 2025, with most located in Lagos and Abuja. South Africa, by comparison, had more than 500 public charging stations.
For many existing EV owners, home charging has become the most practical option. Vehicle owners can connect portable charging cables to household electricity outlets, although unreliable power supply means alternative energy sources are often necessary.
The electricity challenge is also influencing the types of vehicles gaining popularity in Nigeria.
Boboye said extended-range electric vehicles, which combine battery-powered propulsion with a fuel-powered range extender, are becoming increasingly popular because they offer lower operating costs while reducing dependence on charging infrastructure.
According to him, sales of the vehicles doubled this year as consumers sought the benefits of electric propulsion without completely abandoning fuel-powered backup.
Chinese automakers, including BYD and Geely, have also expanded their presence in Nigeria with electric and hybrid vehicles.
Tim Motors, Geely’s Nigerian partner, said new-energy vehicles, including electric and hybrid models, account for about two per cent of its vehicle sales in Nigeria.
Leon Zhan, head of Tim Motors, said Nigeria’s large automotive market offers an opportunity to gradually replace its predominantly used-vehicle fleet with newer and cleaner alternatives.
“Nigeria is one of the largest car markets in Africa, but it is dominated by second-hand vehicles. We want to change that,” Zhan said.
For small businesses and commercial transport operators, electric motorcycles and tricycles could present an even bigger opportunity than passenger vehicles.
Nigeria has more than 15 million motorcycles, while commercial motorcycle and tricycle operators have experienced significant increases in operating costs since the removal of the petrol subsidy in 2023.
Electric alternatives could help operators reduce their daily fuel expenses while creating new markets for businesses involved in vehicle sales, servicing, battery management and charging.
Stanley Nwankwo, co-founder of electric mobility start-up Donda X Limited, said electric motorcycles and tricycles could reduce operating costs by about two-thirds compared with petrol-powered alternatives.
Battery swapping is also emerging as a potential response to Nigeria’s charging infrastructure challenge.
Mobility companies such as MAX and Spiro are investing in battery-swapping networks that enable riders to exchange depleted batteries for fully charged ones within minutes.
The model reduces the time commercial operators spend waiting for vehicles to charge and allows batteries to be charged centrally when electricity is available.
The emerging ecosystem could create business opportunities beyond vehicle sales, including battery-swapping operations, charging services, EV maintenance, spare parts, fleet management, renewable energy solutions and financing for electric mobility assets.
The Federal Government’s tax waivers therefore represent more than an incentive for vehicle imports. They could support the development of a broader clean transportation business ecosystem, particularly if government continues backing local assembly, charging infrastructure and alternative energy solutions.
However, tax incentives alone may not be sufficient to achieve mass adoption.
For electric mobility to become commercially viable at scale, Nigeria will need reliable electricity, more charging and battery-swapping infrastructure, affordable financing and a stronger network of technicians and service providers.
As Nigeria works towards its 2050 electric mobility target, the opportunity is significant. Businesses capable of addressing the practical barriers to EV adoption could become important participants in the country’s transition to cleaner transportation.
