On November 5, 2025, the Nigeria senate sponsored by Senator Orji Uzor Kalu passed the Electric Vehicle Transition and Green Mobility Bill 2025 for its second reading, marking a significant step towards Nigeria’s green transportation journey.
The legislation aims to promote local EV manufacturing, create thousands of jobs, and position Nigeria as a continental leader in green mobility.
The bill was extensively debated, with lawmakers acknowledging the urgency of transitioning to cleaner and more sustainable energy sources.
The bill’s framework: Ambition meets regulation
According to the proposed legislation, clear strategies have been established for Nigeria’s EV transition.
One of such includes the requirement of foreign automakers to partner with licensed Nigerian assemblers and establish local assembly plants within three years, with at least 30 percent local content sourcing by 2030. Violations of this law would attract fines up to ₦250 million per breach.
The bill also mandates every fuel outlet nationwide to install charging stations to enable widespread adoption.
Provision of tax holidays, import duty waivers, toll and road tax exemptions, and subsidies for EV users and investors are also included in the bill.
Assemblers must produce a minimum of 5,000 units annually while meeting international safety standards.
However, one provision in the bill has ignited fierce debate is the ₦500 million penalty per shipment for unlicensed importers, assemblers, and manufacturers of electric vehicles.
This clause, designed to curb gray-market imports and enforce quality standards, has divided stakeholders between those viewing it as essential protection and critics fearing it could strangle the emerging industry.
The ₦500 million controversy: Two sides of the coin
Industry experts defending the penalty argue that ₦500 million roughly equals the value of nine to ten electric vehicles, making it proportionate to typical shipment values.
They contend the fine prevents Nigeria from becoming a dumping ground for substandard vehicles while protecting companies like Innoson, NEV Electric, and Jet Motor Company that have invested substantially in local manufacturing.
For such pioneers, the penalty creates a level playing field against gray-market operators.
Critics, however, warn the fine could devastate startups operating with limited capital.
Economic analyst Uddin Ifeanyi notes that, “the fines and conditions for non-compliance are likely to discourage early foreign participation,” describing the approach as “all stick and no carrots.”
Additional concerns include weak policy implementation, enforcement challenges in Nigeria’s weak customs system, and disproportionate regulatory frameworks.
Nigeria’s EV evolution
Nigeria’s EV journey became official in 2022 with the launch of the Nigeria’s Energy Transition Plan, launched in 2022 which targets 100% EV transition nationwide by 2060 with Lagos state targeting 2050.
In January 2024 too, Nigeria exempted electric vehicles from VAT payment as part of the VAT modification order, 2024.
At COP26, Nigeria committed to deploying 13 million electric vehicles by 2050. Nigeria committed to deploying 13 million electric vehicles (EVs) by 2050 as part of its Energy Transition Plan (ETP).
As at February 2025, Nigerian EV manufacturer, NEV Electric reported $14 million in revenue for over 14 months, making it Africa’s largest mass transit EV bus producer.
Persistent challenges
Despite progress, formidable obstacles remain. Nigeria’s unreliable national grid being the most obvious.
Analyst Uddin Ifeanyi warns, “You cannot build an environment that supports rapid take up of electric vehicle use on the back of a grid as unreliable as the one we currently have, with frequent outages and low effective capacity.”
EVs remain expensive for most Nigerians. While operational costs are lower than petrol vehicles, the upfront capital requirements are expensive for most Nigerians.
Nigeria also faces shortages of technicians trained to repair and maintain electric vehicles. Policy uncertainty compounds these challenges, with frequent regulatory changes creating planning difficulties for capital-intensive automotive investments.
What lies ahead
If the bill passes after the Senate Committee on Industry review, expected in the next four weeks, Nigeria’s automotive sector would undergo transformation.
EV adoption could also be beneficial environmentally, especially with commercial transport. Reduced air pollution could improve the quality of health of citizens.
The path forward
As the Senate Committee reviews the bill, key considerations should include the phased implementation of the ₦500 million fine, transparent and accessible licensing pathways, and establishing a single EV transition authority to avoid bureaucracy.
The legislation must integrate with the manufacturing and power sector reforms and include consumer protection provisions alongside manufacturer regulation.
