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Nigeria will implement a mandatory End-of-Life Vehicle (ELV) fee at the point of vehicle registration starting 2026 to formalise the recycling of old vehicles.
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The initiative is projected to generate over N150 billion annually and create thousands of jobs in dismantling, refurbishment, logistics, and resale of components.
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NADDC will also introduce pre-export certification for used vehicle imports and promote conversion to electric and CNG-powered vehicles.
The Federal Government has announced plans to tap into Nigeria’s largely informal vehicle recycling market, aiming to raise over N150 billion annually from 2026 as part of reforms to modernise the country’s automotive sector.
The National Automotive Design and Development Council (NADDC) disclosed that the initiative will be driven by a comprehensive End-of-Life Vehicle (ELV) programme, which mandates a modest fee during vehicle registration to fund environmentally sound disposal and recycling.
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Joseph Osanipin, NADDC Director-General, explained that the programme will formalise what is currently an informal and sometimes unsafe vehicle disposal market, turning it into a circular economy.
“Over 85% of components from end-of-life vehicles remain reusable or recyclable,” he said, adding that the initiative could become a multi-billion naira industry if properly managed.
Beyond revenue generation, the programme is expected to create thousands of jobs in dismantling, refurbishing, logistics, and resale of vehicle parts.
The government will also enforce pre-export certification for all used vehicles imported into Nigeria, ensuring that substandard vehicles are not dumped into the country.
In a parallel push toward sustainability, the council is promoting conversion of petrol and diesel vehicles to electric or compressed natural gas (CNG) and has developed national standards for EV maintenance and CNG retrofitting, with training programmes set to start in 2026.
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NADDC also highlighted local innovation, noting collaboration with 12 universities and private sector partners to design tricycles, buses, and electric campus shuttles.
Additionally, the council is engaging stakeholders to strengthen component manufacturing, which remains a critical value driver in the sector.
To formalise these reforms, NADDC plans to transform the National Automotive Industry Development Plan (NAIDP) into law, with a draft Auto Industry Bill expected to be presented to the National Assembly soon.
Osanipin acknowledged that some policies may face resistance but stressed the importance of public awareness and media support to ensure the reforms succeed, describing 2026 as a pivotal year for Nigeria’s automotive transformation.
