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Toyota Eyes Electric Vehicle Leadership With N10bn Investment

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Car Production at Toyota's Derbyshire Plant
  • Toyota Eyes Electric Vehicle Leadership With N10bn Investment

Toyota says it is ready to spend $10bn to lead the electric vehicle production and sale globally from next year.

Nigeria may also be a beneficiary of the huge investment with the commitment of the National Automotive Design and Development Council towards the sale of electric vehicles in the country.

Already, the NADDC’s Director-General, Jelani Aliyu, has hinted that the agency is developing an electric car policy to prepare the nation for the production of such vehicles.

Long criticised as the laggard in the industry’s electric vehicle race, Toyota Motor Corporation is said to believe it has a shot at becoming a leader in the segment.

The about-face comes down to a battery breakthrough and new confidence that next-generation solid-state batteries will make EVs more practical.

A report by an online auto journal, Automotive News, quoted the automaker as confirming the N10bn EV investment. It recalled that Toyota last week proclaimed that it had found the final piece of the puzzle to make EVs feasible, and unveiled aggressive plans to roll out more than 10 EVs worldwide by the early 2020s.

The report stated, “The move is uncharacteristically bold for a company that doesn’t sell a single EV nameplate. If its strategy works, it could vault Toyota from the back of the pack to the forefront of the race for battery-powered cars.”

“It’s a dramatic change in stance,”

The Executive Vice President, Toyota Motors, Shigeki Terashi, said, “It’s a dramatic change in stance,” while unveiling the plan in Tokyo, adding, “We have filled the last piece of the puzzle to this grand picture.”

According to him, Toyota will introduce its first EV in China, and then gradually introduce others in Japan, India, the US and Europe. As part of a larger green-vehicle blitz, Toyota also said it would create electrified versions of every nameplate in the Toyota and Lexus line-ups by 2025.

It also quoted a Reuters’ report as revealing that China was leapfrogging over the US in its bid to take advantage of the automotive sector’s seismic shift toward electric vehicles.

Toyota has long argued that EVs would remain a niche segment because of their limited driving range, high costs and slow charging times.

But Toyota has changed gears as governments in China, Europe, India and elsewhere consider mandating eco-friendly vehicles to curb emissions and pollution.

The battery breakthrough will help it overcome some of the technological challenges, including energy density, cost and weight, Toyota now says. It intends to commercialize next-generation solid-state batteries in the early 2020s.

“The battery was the issue,” Terashi said. “It was the missing piece.”

Toyota now envisions a ramp-up to sell 5.5 million traditional hybrids, plug-in hybrids, EVs and hydrogen fuel cell vehicles by 2030. Contained in that target are sales of about one million EVs or fuel cell vehicles a year, accounting for at least 10 per cent of the company’s total global sales. That sales volume would represent more than twice the number of all zero-emission vehicles sold by all makers worldwide in 2016.

Terashi said the automaker would pour about $10bn into vehicle electrification from next year through 2030. Half of that will go toward battery development.

Solid-state batteries have less vulnerability to temperature extremes and promise two to three times the energy density of existing EV batteries.

Toyota’s gambit is not without risks. The required development work could become a money pit if Toyota’s bet on the batteries – described as a Holy Grail next-generation technology by some – proves difficult.

According to the report, developing EVs to comply with regulations leaves Toyota more exposed to the vagaries of government policies around the world.

Toyota’s bullish targets are unusual for a company that loathes to overpromise and under-deliver. But the plans belie confidence in the new direction, analysts say.

“These are pretty bold statements for a company that has a conservative tack on things,” said Christopher Richter, senior auto analyst at the CLSA Asia-Pacific Markets. “They are playing catch-up, but the last six months have been very eye-opening. They are talking a whole lot more.”

Toyota accelerated its strategic change a year ago when it set up a division to tackle EV development. Things heated up barely 90 days ago when the company announced a joint venture with Mazda Motor Corporation and supplier Denso Corporation to co-develop architecture for the EVs.

Subaru and Suzuki are among other automakers that may join the project.

And this month, Toyota agreed with Japanese electronics giant Panasonic Corporation to jointly study development of high-performance batteries that can jump-start EV demand.

Terashi said the upcoming EV batteries needed to have much higher energy capacity than the batteries typically used in Toyota’s hybrids.

The Prius, for example, has a battery with 0.75 kilowatt-hours of energy capacity. EVs, by contrast, will need batteries packing 40 kWh.

Toyota’s foray comes only a month after it sounded a dire warning about the rapidly changing auto industry. Citing the crush of demands for electrification, autonomous driving and connectivity, Toyota said it faces a “now or never” competition “about surviving or dying” in the new era.

The rethinking represents a product shift at Japan’s biggest automaker, which has long favoured its trademark gasoline-electric hybrid technology over purely battery-powered systems.

It could catapult Toyota to the lead among Japanese automakers, including EV pioneer Nissan Motor Company.

Nissan, which introduced its Leaf EV in 2010, has yet to disclose specific plans for its expanded lineup of EVs. But with its global alliance partners, Renault and Mitsubishi, Nissan aims to introduce 12 new zero-emission EVs by 2022.

Honda Motor Company, also a longtime EV skeptic, has disclosed plans only for an EV in China beginning next year, and for another EV for Europe in 2019.

Toyota had remained cool to the EVs since 2014, when it pulled the plug on a deal to build electric Toyota RAV4 crossovers with Tesla Motors Inc.

That same year, Toyota finished deliveries of its other EV attempt, the pint-sized eQ, a battery-driven car based on the Scion iQ three-seater. Commitment to that car always had been half-hearted. In 2010, when Toyota announced the eQ, the company predicted it would sell thousands. But by 2012, Toyota said it would sell only about 100 in the US and Japan.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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Nigeria Will Benefit Less From African Trade Deal – NESG

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Nigeria Will Benefit Less From African Trade Deal – NESG

Nigeria and other resource-based countries will benefit less from the African Continental Free Trade Area than economies that are more diversified, the Nigerian Economic Summit Group has said.

The NESG, a private sector-led think-tank, said in its 2021 Macroeconomic Outlook that Nigeria could reap more gains through export diversification away from crude oil.

It said trade in Africa remained dominated by raw materials and less processed products, adding that on average, minerals and agriculture accounted for 44 per cent and 16 per cent of intra-African trade respectively between 2007 and 2017.

The NESG said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.

“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.”

“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic,” it added.

The group said the World Bank estimates revealed that the AfCFTA would promote manufacturing exports over natural resources, agricultural and services exports, and that manufacturing exports would account for one-third of the projected total exports of $2.5tn by 2035.

It said, “Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.

“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.

“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.”

According to the NESG, for Nigeria to maximally benefit from the trade deal, there is an urgent need to also address transport infrastructure bottlenecks and provide improved logistics.

It said, “Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.

“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.

“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.

“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”

The group noted that owing to the outbreak of COVID-19, the implementation of the AfCFTA was postponed from July 1, 2020 to January 1, 2021.

It said, “The key goal of the free trade pact is to expand the volume of intra-African trade, which stood at 16 per cent in 2018 .“Till date, 36 countries, including Nigeria, have ratified the agreement. The trade deal is expected to create a single market with a combined GDP of $2.5tn and total population or market size of 1.2 billion.”

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