The Electric Vehicle Transition and Green Mobility Bill, sponsored by Senator Orji Uzor Kalu (Abia North), was approved for a second reading by the Senate on Wednesday, November 5, 2025.
The bill, which has been referred to the Senate Committee on Industry for review and will return to the Senate Chambers in four weeks, seeks to facilitate Nigeria’s transition to electric vehicles (EVs).
If passed into law, Nigeria will join a growing list of African countries that have created policies to boost EV adoption, including Ethiopia, Kenya, and Rwanda.
Key provisions of the bill
The EV Transition and Green Mobility Bill lays out a framework to strengthen local EV production, drive adoption, and attract investment into Nigeria’s electric mobility sector. It also sets tougher conditions for foreign automakers doing business in the country.
First, it mandates that foreign automakers can only import, sell, or distribute their electric vehicles through local partnerships.
Secondly, foreign automakers operating in Nigeria are required to establish a local assembly plant within three years of their operations. They are also expected to source at least 30% of their vehicle components locally by 2030.
The bill also stipulates that local assemblers, manufacturers, importers, distributors, or sellers must obtain a license to operate. To qualify for a license, assemblers and manufacturers must demonstrate the ability to produce at least 5,000 electric vehicles annually.
Unlicensed dealers who engage in the importation, assembly, distribution, or sale of electric vehicles will be fined ₦500 million and have their goods confiscated. Foreign automakers who violate the bill’s requirements are also liable to a fine of ₦250 million for each act of non-compliance.
Beyond the strict requirements for foreign and local operators, the bill outlines incentives, including waivers, subsidies, and tax holidays for individuals and businesses in the electric vehicle business; exemptions from road tax and emission testing for EVs; and toll-free access to highways for EVs. However, the bill failed to provide additional details on what these waivers and subsidies are.
Under the bill, the Federal Ministry for Industry, Trade, and Investment is tasked with coordination and implementation. The Federal Ministry of Transportation, the Federal Ministry of Power, the Federal Inland Revenue Service, and the Federal Ministry of Environment also have responsibilities towards the successful implementation of the bill.
Potential impact of the bill
Looking through the bill, it is apparent that the goal is to encourage local development of Nigeria’s EV ecosystem rather than relying on foreign players. However, experts are divided on whether Nigeria’s EV ecosystem is mature enough for its demands.
Ayodeji Audu, Founder and CEO of Reown, tells Techpoint Africa that the bill is a welcome development, and mandating foreign automakers to establish local assembly plants will ensure that Nigerians have access to trained experts who can effectively repair faulty vehicles.
“What the government is trying to do is to empower our local businesses and, most importantly, to reduce the price of electric vehicles. If 30% of whatever you need to assemble a car is sourced locally, it will have an impact on the price of the car,” he says.
However, sourcing content locally to reduce prices is only feasible if Nigeria has sufficient resources to meet this quota. Otherwise, manufacturers will be forced to source materials abroad, thereby maintaining high prices.
Also, local materials might still command high prices if manufacturers can find foreign buyers willing to pay more.
An analyst who asked not to be named held a differing opinion. He argues that Nigeria’s EV market is still too young for many of the bill’s provisions.
“Save for BYD, which recently announced its entrance into Nigeria, we do not have that many electric vehicle companies interested in coming into Nigeria. This is because the market is different; right now, it’s just for two-wheelers and a few tricycles.
“So, the part of the bill requiring foreign companies to establish local assemblies within three years will not achieve anything because there is little demand for the market.”
The analyst asserts that while the bill does not adequately capture the market’s needs, the tax breaks and incentives for EV business owners could lead to an influx of investment into Nigeria’s EV space, which is what could transform the market.
“The market needs money. That bill should try and facilitate investments. It might facilitate some investments with the tax breaks, but it needs to do more because that is the major challenge with EV manufacturing and adoption right now.”
Femi Oriowo, Co-founder and CEO of Carbin Africa, expresses a similar opinion. He thinks foreign EV manufacturers will be upended by the policy shift because Nigeria’s market for brand-new cars is not large enough to support such significant investments.
“The few foreign automakers that have a presence in Nigeria operate via local OEMs and assembly plants. So, requiring them to have assembly plants here might be a tall order,” he says.
Lessons from other African countries
Nigeria is not the first country to toe this path. In 2024, Ethiopia took a stricter stance, becoming the first country in the world to ban the import of fuel-powered vehicles and offering huge tax breaks to EV importers.
However, a year after introducing the policy, EV adoption remains low, with cost being the main reason. Despite the government subsidies, the cost of purchasing an EV in the country remains higher than an average Ethiopian can afford.
The situation in Nigeria is similar. EVs are significantly more expensive than the average fuel-powered vehicle, making them a luxury the average Nigerian cannot afford.
There are an estimated 15,000 to 20,000 EVs in Nigeria, representing 0.5% of the country’s vehicles. This number is driven by motorcycles and tricycles. The case is the same in other African countries where EV adoption is on the rise, such as Kenya and Ghana.
The cost of four-wheelers poses a major barrier. EV prices in Nigeria range from ₦12 million to ₦150 million
Uche Ukonu Jnr, a stakeholder in Nigeria’s EV ecosystem, suggests that if the bill is determined to encourage a transition to EVs, the best path would be to facilitate affordability rather than focus on the source — manufacturers and assemblers.
Oriowo agrees that mass adoption will be encouraged by credit and financing facilities.
“A lot of people have had their purchasing power eroded in the past couple of years. The average user cannot afford to buy a used car outright. The demand for financing surged heavily, and for mass adoption to happen, the government needs to look into financing initiatives,” he says.
In addition, unlike other African countries leading EV adoption, Nigeria is adopting a stick-over-carrot approach.
The International Energy Agency ranks Ghana, Morocco, South Africa, Tanzania, and Ethiopia as the top five countries leading EV adoption on the continent.
All of these countries have approached EV growth through incentives, primarily tax exemptions and reductions. Nigeria’s bill seems to be taking a different approach, making demands on manufacturers and assemblers and imposing huge fines for non-compliance.
While developing the country’s local EV manufacturing and assembly industry is crucial and strategic, it is more important to create an enabling environment for investment.
Ukonu argues that, despite the arguably strict requirements, the primary consideration for investments into Nigeria’s EV space is robust infrastructure.
“The rules seem stringent, but if investors and foreign automakers see that Nigeria has good infrastructure, like stable power supply, they will come into the country. So, that is what Nigeria needs to fix.”
The bill aims to address part of Nigeria’s infrastructure issues by mandating that all fuel stations install electric vehicle charging points. While this could ease potential friction in EV adoption, the country’s infrastructure problems go beyond charging stations.
If the bill is passed, successful implementation will depend heavily on how well the country can maximise and expand its infrastructure and provide sufficient incentives for business owners, rather than making demands on them.
