$260m investment: 4 questions about Lagos' plan to add 1,000 EVs to LagRide fleet

·
July 19, 2024
·
5 min read
A fleet of LagRide vehicles parked on green grass

On Monday, July 15, 2024 the Lagos State Government announced a $260 million investment to acquire 5,000 new vehicles for its state-owned ride-hailing platform, LagRide.

Out of this fleet, 1,000 will be electric vehicles.

According to the report, this will demonstrate "the commitment of the State Government to reducing dependence on fossil fuels and pruning the carbon footprint."

The Lagos State Governor, Babajide Sanwo-Olu also said that the vehicle will help Lagos live up to its potential, joining the ranks of cities with smart mobility systems.

Advertisement

This isn't the first time Lagos has revealed intentions to use EVs for transportation in the state. In April 2023, it announced the arrival of its first set of electric buses in the Lagos State Mass Transit Plan.

While the idea of smart mobility and reducing carbon footprint in Lagos makes sense, Lagos state might not be ready for electric vehicles.

Can LagRide drivers afford EVs?

Interior of a Tesla model 3
Tesla Model 3

EVs are generally more expensive than internal combustion engines (ICE) and this is due to the high cost of their batteries, which are made from costly materials like lithium, cobalt, and nickel. These batteries account for a significant portion of the overall cost of an EV.


Additionally, the manufacturing process for EVs, which includes advanced technologies and the need for extensive research and development, adds to their higher price tag.

To be fair, this cost difference has been decreasing over the years. Advancements in battery technology, increased production scale, and improved supply chains have led to a gradual reduction in EV prices.

Let the best of tech news come to you
Join 30,000 subscribers who receive Techpoint Digest, a fun week-daily 5-minute roundup of happenings in African and global tech, directly in your inbox, hours before everyone else.
Digest Subscription

Give it a try, you can unsubscribe anytime. Privacy Policy.

READ MORE   EV company Spiro inks $50 million deal to expand into more African countries

According to BloombergNEF, the cost of EV batteries have fallen by about 87% from 2010 to 2020, and this trend is expected to continue, potentially making EVs as affordable as ICE cars in the near future.

However, an average EV car would still cost at least $20,000 according to Inside EVs.

This price is out of reach for LagRide drivers who are expected to pay for these vehicles.

Last year, many of the drivers who spoke to Techpoint Africa stated how difficult it is to pay for the $10,000 (₦15 million) GAC SUV leased to them by the government-owned company.

Unlike Bolt and Uber, LagosRide uses a lease-to-own model where drivers get a car after a ₦700,000 down payment.

This down payment was initially 20% (₦3 million) of the total cost of the car, but it had to be reduced after many drivers could not afford it.

But Derek Ewelukwa, the CEO of Jet Mortors sees things differently.

"It is my belief that this consideration of affordability would have been made prior to making the huge investments in the 1000 EV."

He feels that the move by the Lagos State government could ignite an interest in the EV market by different people from those that want to invest in charging stations to those that could invest in ways of powering those stations.

How much will the new EVs cost?

While there's no information about how much the EVs will cost, we know that the vehicles will be acquired through CIG Motors Company Limited.

READ MORE    Amazon delays plan to launch its African marketplaces 

CIG Motors Company Limited is the representative and distributor of GAC Motors in Nigeria.

The Chinese carmaker is the ninth largest EV manufacturer in the world, producing over 500,000 EVs in 2023.

GAC manufactures its electric vehicles under the brand GAC Aion which has five models — Aion S, Aion S Plus, Aion V, Aion U, and Aion LX SUVs.

An image of GAC Aion
GAC Aion. Source: CarNewsChina.com

Of these five models, the most affordable is the Aion S sedan at $16,000 ( ₦25 million).

However, at the event where Lagos State signed the partnership with CIG Motors Company Limited, Sanwo-Olu was spotted in a mini electric vehicle called the Baojun Yep. An EV by another Chinese manufacturer, SAIC-GM-Wuling.

The mini EV was priced at $11,160 (₦17.6 million) when it launched this year. Whether it's the Bajun Yep or the Aion S, these cars might still be too pricey for LagRide drivers.

A mini EV called Baojun Yep
2024 Baojun Yep mini EV. Source: Momo Technologies

Does Lagos have EV infrastructure?

an electric vehicle charging
Photo by Possessed Photography on Unsplash

While reducing the State's carbon footprint is a good cause, Lagos doesn't have enough infrastructure to support EV usage.

One of them is EV charging stations.

Some companies like Siltech and SAGLEV have these facilities — one each — but they will hardly serve the 1,000 EVs used by LagRide.

But, drivers also have the option of indoor charging. Depending on the range of the EVs, this could suffice.

The Baojun Yep, for example, has a range of 303 kilometres (km). For context, Lagos to Ibadan is 131 km. This means that a full charge could serve a LagRide driver for a whole day.

The Aion S on the other hand has a range of 500 km, which means a full charge could last some drivers a couple of days before they need to recharge.

READ MORE   “Technology can’t induce financial inclusion, it can only mimic our decisions” -- Sola Fanawopo, fintech expert

Ewelukwa also added that the importation of 1,000 EVs by the government "hopefully spur the rollout of the requisite infrastructure to complement the entire EV value chain from end to end."

How much will drivers spend on maintenance?

Drivers will spend a lot less as EVs have very low maintenance costs.

They have fewer moving parts compared to traditional ICE cars.

EVs don't require oil changes, fuel filters, spark plugs, or complex exhaust systems. Their braking systems also last longer due to regenerative braking, which uses the electric motor to help slow the car and recharge the battery.   

EVs obviously have their perks over ICE, but this investment might not yield fruits if the Lagos State government does not take some of these questions into consideration.

He's a geek, a sucker for Blockchain and an all-round tech lover. Find me on Twitter @BoluAbiodun1.
He's a geek, a sucker for Blockchain and an all-round tech lover. Find me on Twitter @BoluAbiodun1.
Subscribe To Techpoint Digest
Join thousands of subscribers to receive our fun week-daily 5-minute roundup of happenings in African and global tech, directly in your inbox, hours before everyone else.
This is A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day! 
Digest Subscription

Give it a try, you can unsubscribe anytime. Privacy Policy.

He's a geek, a sucker for Blockchain and an all-round tech lover. Find me on Twitter @BoluAbiodun1.
Other Stories
43b, Emina Cres, Allen, Ikeja.

 Techpremier Media Limited. All rights reserved
magnifier