Following the recent removal of subsidy on premium motor spirit (PMS) popularly known as Petrol, which has resulted to increase in price of the product nationwide, financial institutions have been urged to work towards bringing down the lending rate to make electric vehicles affordable for Nigerians.
Head, Sales & Marketing, Hyundai Motors Nigeria, Gaurav Vashisht gave this advice in an exclusive interview with BrandEscort reporter in Lagos.
“Almost all Nigerian banks have the product called asset financing, which means they can finance brand new vehicles for their customers. But the issue most people have with the banks is on the lending rates. The lending rates are high, mostly in the range of 23% to 26%. And if you compare this with some other countries outside Nigeria, it’s very high. For an individual whose income has not increased in the past, let’s say two years, three years, four years, paying a high interest of 20% and above is not easy. Assets financing, like vehicle financing should be in the range of 5 to 10% . It has to be in single digit,” Vashisht said.
He said the issue of power must be resolved to accelerate the development of EVs changing infrastructures across the country.
He urged the federal government to reduce duties on EVs and also come up with policies that will ensure provision of subvention for EVs companies to reduce the price of the product, because of its zero emission advantage over the fossil-fuel-powered engines.
Vashisht said: “We have seen in the past, let’s say about two years ago how prices had gone up drastically. And that’s all because of the issue of Forex.
These are the factors which make a lot of issues in the market when it comes to pricing”.
Speaking from a global perspective, Vashisht said: “Things are changing, and things are changing rapidly when it comes to the climate change. And, you know, more and more countries are taking it more seriously now.
“If we talk about developed nations, you know, they are giving more emphasis on the EVs and when it comes to developing nations like Nigeria, that emphasis has been given to the economy. But yes, the rate at which more and more people can go for the EVs or alternative vehicles in Africa is very slow compared to those in the US or in the Europe, because they have implemented these changes many years back, while we are still waiting over here to get something concrete on the paper.
“Nigerian economy is mostly based on the export of crude oil. About 95% of the revenue which we get is from the export of the crude oil. Yes, we are still on the same page, but slowly and steadily things will change here as well. Now that the Dangote refinery is opened, it will benefit in saving the Forex. The economy will be helped by the opening of the new refinery. At the same time, we also need to look at the other perspective like the global change, or climate change and we have to work towards that also at the same time by launching more and more EVs and alternative vehicles for the masses to change the way transportation looks like in the country,” he said.
In 2020, Hyundai Kona became the first locally assembled electric car in Nigeria and in Africa.
In a bid to revolutionise the very idea of how we power movement, Sterling Bank recently announced the launch of Qore; its suite of renewable energy-powered transportation solutions.
According to the financial institution, Qore will offer the purchase and financing of electric vehicles (EVs), EV charging stations, conversion of fossil-fuel-powered engines to EV engines, battery swapping services for modular EVs, and more.
Speaking at the launch of Nigeria’s first publicly available EV charging station in Lagos, CEO of Sterling Bank, Abubakar Suleiman, said that the launch of Qore is a significant milestone in the bank’s journey towards powering Nigeria’s transportation sector with renewable energy.
According to Suleiman, “Qore will provide clean, sustainable and cost-effective options for individuals and businesses, while impacting positively on the sector’s environmental footprint.“