Oando to roll out 5,000 e-buses in Lagos

From the newsletter

Nigerian oil company Oando Plc has partnered with Lagos State Government to roll out 5,000 e-buses in the city for public transportation. This is part of the company’s project to deploy 12,000 e-buses in Lagos by 2030. In 2022, the company partnered with Chinese EV maker Yutong Bus Co Limited to make the buses. 

• Like Oando, many oil companies in Africa and beyond are investing significantly in electric mobility. These investments are being directed toward EV manufacturing, establishing charging stations and creating battery facilities.

• The investments by oil companies in EVs are primarily to diversify their business portfolio. This trend is coming at a time when demand for EVs and related services such as charging infrastructure is growing.

More details

• With over 25 million residents, Lagos is the most populous city in Africa and among the top ten of the world’s fastest-growing megacities. Over the last decade, the number of vehicles on Lagos roads has quadrupled.

• Oando is piloting the e-buses project in Lagos before it is rolled out in other states in the country. The company says that gas will be used as a transit transitional fuel to produce the electricity needed to power the buses.

• Globally, the burgeoning growth of EVs presents a potential challenge for the oil and gas industry. Global EV sales are expected to hit 10 million by the end of this year, potentially reducing oil demand by 350,000 barrels per day.

• Oil and gas companies across Africa and across the world have had to adjust and diversify their investments and strategies in response to government and environmental pressures to reduce emissions. One potential avenue for alternative investment is EV charging stations, which can complement their existing assets such as fuel filling stations.

• These companies already own a vast network of retail stations which are ideal spots for the establishment of EV charging stations. Some of these firms are already partnering with EV companies to set up the charging infrastructure.

• Vivo Energy, which markets Shell products in Africa, is piloting EV charging infrastructure in a number of our markets, such as Mauritius, Reunion, and Morocco, to understand its potential. French oil major TotalEnergies is also establishing EV charging points across Africa, including 13 which it has already set up in Kenya.

Our take

• Oil companies could prove to be a useful ally in the race to make more people buy EVs. One of the main challenges facing the adoption of EVs is the lack of charging stations. But oil marketing companies already have vast networks and are often well capitalised. This puts them in an advantageous position of setting up EV charging points in vantage spots.

• A lot of components used to make EVs come from petrochemicals. For instance, Lithium-ion batteries – essential components of electric cars – contain electrolytes made from petrochemicals. Additionally, the electrodes in lithium-ion batteries contain graphite and other materials derived from oil and gas. This means that collaborations between oil companies and EV manufacturers will remain pivotal.

• The success of e-mobility in Africa will be determined by collaboration. All industries must contribute to the EV revolution. While not all companies can join the EV market as manufacturers or service providers, they can support the e-mobility transition by prioritizing the purchase of EVs for their fleets in their budgets. s for their fleets in their budgets.