How Collaboration Between Dealers And Solar Firms Can Boost Nigeria’s Electric Vehicle Sector
The electric vehicle industry in Nigeria is very nascent. The issue that has been raised over and over again is that Nigeria is not ready for electric vehicles deployment. This seemed true and only compounded by the fact that there is no formal policy or regulation created by the government to back the electric vehicle industry. In fact, when a senator proposed a bill for EV regulation to the senate, they called it irrelevant.
Critics mentioned that Nigeria’s oil fueled economy and dependence on oil as major economic resource is a significant cause of the bill rejection. However, the private sector has taken a lead in championing electric vehicle business models as they try to deploy solutions for the market. To maximize profit, few electric vehicle companies have implemented various strategies according to the environment and market.
Partnership between EV Automotive Companies and Solar Charge Point Operators
South Africa’s case in Point
In my study, I have observed a business model which I will speak about in detail during the course of this article. I first noted the trend with South Africa’s unique partnership with automobiles and charging infrastructure service providers.
The company involved – GridCars gets into a unique agreement with automobile companies retailing electric vehicles to provide charging infrastructure within the locations where their customers live and along the routes they ply regularly.
This simple collaboration, increased the automobile company’s value offering and killed the range anxiety issue faced by EV users as customers have access to a charging infrastructure near them. Consequently, this increased customer’s interest in electric vehicles thereby tripling sales for the automobile companies. GridCars even go as far as offering overnight charge service to some of the customers.
Collaboration between Electric Taxi Hailing Companies and Solar Companies for Charging Point Establishment
Nigeria’s Case in Point
A very interesting EV business model which can skyrocket the deployment of electric vehicles in Nigeria is a partnership which is similar to that observed in South Africa between Automobile retail companies and EV charge point service providers.
In this case it is a collaboration between EV taxi hailing companies and solar companies to provide solar charging infrastructure. At this time, there is one example of this partnership existing successfully in Nigeria which is a testimonial to how this model (EV automobiles and solar charge point operators) can disrupt the EV business space in Nigeria.
As I will describe below, what makes this sort of partnership interesting is the fact that the solar company involved has a mini-grid deployment service as part of its business plan. I will explain why this is important.
A Practical Example of this Collaboration
In August 2020, a popular fleet motorcycle taxi hailing company, MAX NG launched its e-motorcycles, the MAX E Series which has 1500mAh battery life and a running speed of 60km/h MAX. They partnered with a solar company – Rubitec Industries which also has mini-grid power stations across the country to provide solar powered charging and swapping stations for the e-bikes. This is already operational in Ogun State Nigeria.
It is interesting considering the role that electric vehicles can play for a mini-grid power station. The batteries used for the fleets of the motorbikes will charge from the mini-grid. This will draw a flexible and substantial load of electricity that can provide an income stream for the mini-grid.
Additionally, passenger taxi hailing giant – Uber which has huge presence in Nigeria recently announced their plans to electrify their cars in 2030. When Uber extends this initiative to Nigeria, this model will greatly aid their intention.
Why is this sort of partnership mostly important?
As I mentioned earlier in this article, there is no formal policy or regulation backing the electric vehicle sector in Nigeria. This of course has caused some setback to the full deployment of electric vehicles in the country due to lack of incentives or any of the other perks that come with full government endorsement and support.
But there is an interesting perspective on this issue that everyone else is missing – there is a robust policy and regulation for renewable energy development including mini grids in Nigeria. In fact mini-grids have its own dedicated policy and regulation – the NERC’s 2016 Mini Grid Regulation.
This sort of partnership is important because the huge governmental support that mini-grid has received in Nigeria is very enabling for electric vehicles deployment.
This is because mini-grid companies in Nigeria have struggled to be bankable. Most of them require an anchor load to make sense of the business model. In fact, according to a report by Nigeria’s rural Electrification Agency and Rocky Mountain Institute, mini-grid companies in Nigeria have reportedly created small manufacturing businesses in rural communities they work in where the equipment can serve as anchor load with the beneficiaries paying back in installments.
Therefore, a new business model could be in the offing as a result of the collaboration between e-taxi hailing companies and solar companies. This model is mini-grid companies adopting three wheeler EVs through a rent to own community scheme as additional revenue source. I share more details below.
Mini-grid Companies Adopting Electric Vehicles as a Means of Additional Revenue
According to IRENA, EVs represent a paradigm shift for both the transport and power sectors, with the potential to advance the decarbonisation of both sectors by coupling them. Nigeria’s mini-grid sector is rising by the day. According to a World Bank report, there are 11 mini-grids in the country which represents a 17per cent growth from 2005 to 2015. The growth recorded has been as a result of massive government support through a clear policy and regulation.
One of the main challenges of Mini-grids is that they are costly to install, and often have a low electricity demand from domestic customers. This makes it hard to achieve commercial viability without ‘anchor’ loads.
How it will Work
With this noted rise of mini-grids across the country, more opportunities exist for collaboration with electric vehicle retail or taxi hailing companies. Electric vehicles can support mini-grid companies by the addition of more productive electricity loads to the system and batteries can create additional electricity storage.
Mini-grid companies can partner with more automobiles companies to provide charging solutions under a battery swap model. The revenue from battery charging service can augment direct electricity sales reducing payback periods and making mini-grid assets bankable. Additionally, mini-grid companies can create a new revenue stream by setting up three wheeler electric vehicles rent to own services for community members where they work.
These EV tricycles will play a great role supporting public mass transportation and also serve as anchor load for the mini-grid. The mini-grid company provides battery swapping services for the tricycles and can store power in stationery batteries. It’s a win-win situation as the mini-grid company, provides economic development opportunity in the community and at the same time improves their bankability through anchor loads.
Increased Capacity for V2X Services
In no time, mini-grid companies could start V2X services with a pilot V2G program as they already have some of the necessary requirements and increased capacity.
There are massive opportunities for electric vehicle deployment in Nigeria. These models shared will ease up the process. If explored accordingly, it will improve economic development through job creation and help us attain a Climate Smart Society.
. Oguegbu is the founder of and chief instructor at RETTI. The institute grooms the next generation of efficient installers and entrepreneurs with a focus on women who will serve as a competent workforce for the renewable energy industry and provide solutions to Nigeria’s prevalent energy problems as entrepreneurs.
• Oguegbu is the founder/CEO of RETTI Institute, which trains the next generation of efficient solar installers and entrepreneurs to serve as a competent workforce for the renewable energy industry. In 2021, she created the Global Youth Coalition for Electric Vehicles to galvanise youths to take action for the promotion of electric vehicles globally.
Source: thisdaylive
