BYD enters Africa’s largest mark

From the newsletter

Electric vehicle manufacturer BYD has now officially entered Nigeria, Africa’s largest market with more than 227 million people. This is through a partnership with Loxea Nigeria, which will be BYD’s official distributor in the West African country. A subsidiary of CFAO Mobility, Loxea has started with a lineup of the BYD Dolphin and BYD Atto 3 for leasing and sale.     

• BYD is rapidly expanding its presence in Africa, where it is now in nearly a dozen countries following its entry into Nigeria. The carmaker is also in Egypt, Kenya, South Africa, Madagascar, Senegal, Morocco, Zambia, Zimbabwe, Tunisia, Ethiopia and Rwanda.  

• However, BYD’s EVs can be found in many more African countries even where the company does not have official dealerships. This is because as the world’s second-largest EV manufacturer after the US’s Tesla, its vehicles are in high demand especially as the company is now making some of the cheapest EVs available anywhere in the world. 

More details

• Managing Director of LOXEA Nigeria, Mehdi Slimani, stated, “Our upcoming showroom in Victoria Island, Lagos will be a place dedicated to the discovery of BYD vehicles. It is very important for CFAO Mobility in Nigeria to participate in this way in the country’s energy transition and support our customers who wish to make the switch to electric.”

• Despite being Africa’s most populous country, the number of EVs in Nigeria remains tiny. It is estimated that there are about only 5,000 EVs, nearly as much as Kenya, which has a population four times smaller than Nigeria’s.

• Existing EV companies in Nigeria include Innoson Vehicle Manufacturing Company (IVM), which is Nigeria’s first indigenous EV company, Electric Motor Vehicle Company (EMVC), Saglev, Spiro, and Max, an EV financing startup. Majority of Nigeria’s EV firms focus on electric motorcycles, whose demand is growing sharply.  

• Many challenges inhibit the uptake of EVs in Nigeria. Key among them is that charging infrastructure remains limited, with only a few stations available, such as those installed by Possible EVs and Sterling Bank in Lagos. Expanding this infrastructure is crucial to support EV adoption.

• The country is also notorious for power cuts, with most Nigerians getting electricity for only a set number of hours per day. This worsens fears about how hard it will be to charge an EV, discouraging potential buyers.

• Despite all these challenges, Nigeria has significant potential to become a leader in Africa’s electric mobility race. Nigeria used to have one of the cheapest fuel prices in the world, thanks to government subsidies. But President Bola Tinubu removed these subsidies in 2023, which has seen prices skyrocket. This presents an opportunity for EVs to stake a claim.

• Investors have taken note of Nigeria’s potential, and are pouring money into the country’s nascent EV industry. Companies like MAX, an EV startup, have raised significant funding, with a total of $39.6 million to support its operations. Spiro is also building a motorcycle assembly plant with a capacity of 100,000 units annually. 

Our take

• BYD’s entry into Nigeria, along with its growing presence in Africa, is likely to catalyze broader EV adoption across the continent. Its affordable EV lineup, headlined by the BYD Seagull, addresses key barriers like cost, making EVs more accessible to middle-class consumers and businesses.

• Partnerships with distributors like Loxea and CFAO Mobility may spark greater investments in EV infrastructure, such as charging networks and maintenance services. This could pave the way for a more comprehensive ecosystem supporting EV growth in Africa.

• As BYD continues to expand its footprint, its competitive pricing strategy could solidify its position as a leading EV provider in Africa. This might push competitors to enter the market or innovate to keep up, accelerating the continent's transition to sustainable mobility.