As Nigeria pushes toward a sustainable future, electric vehicles (EVs) are gaining traction as a cleaner, cost-effective alternative to traditional petrol and diesel vehicles. The Nigerian government, recognizing the environmental and economic benefits of EVs, has introduced several incentives to encourage their adoption. If you’re considering purchasing an EV, here’s what you need to know about the government incentives available in Nigeria and how they can make your transition to electric mobility more affordable.
Why EVs Matter in Nigeria
Nigeria’s transportation sector is a significant contributor to carbon emissions, with passenger vehicles accounting for nearly three-quarters of transport-related CO₂ emissions, leading to around 1,500 premature deaths annually due to air pollution. EVs offer a solution by reducing tailpipe emissions and dependence on costly fossil fuels, especially after the removal of fuel subsidies. The government’s Energy Transition Plan (ETP) aims for 60% EV market share by 2050 and 100% by 2060, supported by policies to make EVs more accessible.
Key Government Incentives
The Nigerian government is implementing a range of fiscal and non-fiscal incentives to promote EV adoption, particularly through the Nigerian Automotive Industry Development Plan (NAIDP) 2023–2033 and the National Action Plan for the Development of Electric Vehicles (EVDP). Here are the main incentives available:
1. Tax Incentives and Import Duty Exemptions
Reduced Import Duties: The government offers reduced import duties on EVs to lower their upfront costs. This makes imported models like the Nissan Leaf or Hyundai Kona Electric more affordable compared to traditional vehicles.
Value-Added Tax (VAT) Exemptions: EVs are also exempt from VAT and Import Adjustment Tax, further reducing financial barriers for buyers.
Tax Relief for Buyers: While specific details are still being finalized, the government is exploring purchase rebates and tax credits for individuals buying EVs, similar to models in countries like the U.S., where buyers can receive up to $7,500 in tax credits.
Tax Breakdown Table: EV Rate vs. Non-EV Rate
Tax/Duty Component
EV Rate
Non-EV Rate
Import Duty
10 – 20%
35%
NAC Levy
15%
35%
Value Added Tax (VAT)
Exempt
7.5%
Import Adjustment Tax (IAT)
Exempt
Variable (up to 20%)
ECOWAS Trade Levy
0.5%
0.5%
2. Subsidies for Local Manufacturing
The EVDP targets 30% locally produced EVs by 2032, with financial incentives like tax breaks for manufacturers investing in EV production.
Under the NAIDP, EV manufacturers receive extended tax relief for up to 10 years, compared to 5 years for other automotive sectors, encouraging affordable local production.
These measures aim to generate employment and develop domestic value chains. And at the same time encourage technology transfer and lower reliance on imports over time.
3. Non-Fiscal Incentives and Mandates
Vehicle Eligibility: Only EVs manufactured from 2015 onward are importable, with exemptions from adjustment taxes for engines of 2,000cc or smaller.
Adoption Targets: Government aims for 30% locally produced EVs by 2033, fostering a domestic industry that could lower prices through increased supply.
Incentives encourage SMEs to enter the supply chain for components, batteries, and charging solutions.
4. Support for Charging Infrastructure
Initiatives like NEV Electric’s plan to install 300 charging stations in Abuja and Lagos by August 2025, alongside producing 2,000 high-capacity EVs and 10,000 micro EVs.
The Energy Commission of Nigeria launched a 5-kilowatt solar-powered hybrid charging station in Abuja, capable of charging four vehicles simultaneously.
These efforts address infrastructure gaps, indirectly incentivizing EV purchases by reducing “range anxiety.”
Summary Table: Key Incentives at a Glance
Incentive Type
What It Is
Who Benefits
Duty & Tax Exemptions
Zero import duties, VAT, and Import Adjustment Tax
Individual buyers, importers
Age Eligibility
Only EVs made from 2015 onwards allowed
Ensures quality and safety
Local Assembly Mandates
Partners must build assembly plants within 3 years
Manufacturers, economy
Tax Reliefs for Production
Up to 10 years for local EV/component makers
Industrial investors
Market Growth Support
Infrastructure and financing frameworks boosting adoption
Buyers, manufacturers
Challenges to Consider
While these incentives are promising, challenges remain:
High Upfront Costs: Despite tax breaks, EVs like the average battery electric vehicle (priced around ₦23 million) remain expensive compared to Nigeria’s average annual salary of ₦2 million in Lagos.
Limited Charging Infrastructure: Only a few urban centers have public chargers, and rural areas rely on off-grid solutions like solar.
Policy Shifts: The government’s pivot to Compressed Natural Gas (CNG) vehicles has slowed some EV initiatives, with the 2025 target of 7.5% EV penetration unlikely to be met.
How to Take Advantage of These Incentives
Research Eligible Vehicles: Check with local dealers for EV models that qualify for tax breaks and import duty exemptions.
Consult Dealerships: Many dealerships handle the application of government incentives, ensuring you receive discounts at the point of sale.
Explore Financing Options: Look for banks or programs offering EV-specific loans, which may be supported by government-backed de-risking initiatives.
Stay Updated: Policies are evolving, so monitor updates from the NADDC or the Nigeria Investment Promotion Commission for new incentives.
Conclusion
Nigeria’s government is laying the groundwork for an EV revolution through tax incentives, import duty exemptions, and infrastructure development. While challenges like affordability and charging networks persist, these incentives make EVs an increasingly attractive option. Whether you’re a commuter or a business owner, now is the time to explore EVs and leverage these benefits.
For the latest details on incentives, subscribe to our weekly newsletter or visit the NADDC website for up-to-date information.
