Egypt to launch first local electric car in May

From the newsletter

Egyptians will get the first glimpse of the country’s first locally-made electric car in May when it is expected to be launched. The car is made by state-owned El Nasr Automotive Company & China’s Dongfeng Motor Industry Import and Export Company. It will sell between $10,000 and $15,000, way cheaper than imported EVs. 

• Egypt will now join a handful of African countries that have made their own electric cars. Others that have accomplished this feat include Morocco, South Africa, Nigeria and Burkina Faso. The car’s price is within the range of most ICE vehicles, which will make it competitive.

• The launch of the car will however not satiate the North African country’s ambition to become a regional electric car manufacturing hub. Egypt has signed agreements with other auto firms, mainly Chinese such as FAW, BAIC and Alkan Auto, to make affordable electric cars in the country.

More details

• The electric car is the culmination of more than four years of background work by Egypt and Dongfeng, which is a leading Chinese EV manufacturer. El Nasr signed a contract with Dongfeng for the manufacture of electric cars in January 2021.

• More details are expected to emerge about Egypt’s pioneer electric car in the coming months, but what is currently known is that the car will have a local component of about 50% in line with the country’s plan to grow its local manufacturing sector.

• The Egyptian government is planning to offer subsidies of up to $2,500 to buyers for the purchase of the locally-made electric car. The two automakers are expected to commence pre-orders of the car, which has been made to local specifications.

• The exact make and specifications of the vehicle have not been revealed. But Dongfeng is known for a variety of electric passenger cars, including compact city cars like the Nano Box and other models under their "eπ" brand.  It also produces electric SUVs, such as Forthing.

• Egypt is seeking to grow its EV industry by attracting major automakers to establish plants in the country. The North African country has rolled out incentives like lower tax rates to stimulate its automotive sector. Egypt is also positioning itself as an alternative investment destination to its regional competitors such as Morocco and Algeria.

• Demand for EVs in Egypt is growing rapidly despite forming only a tiny share of total demand. Egyptians bought 2,938 EVs in 2024, nearly doubling the country’s count to 6,150. It is still a drop in the ocean in a year when 102,200 vehicles were sold. However, stronger sales have propelled Egypt to the top of Africa’s EV market, beating South Africa and Morocco which sold 1,257 and less than 1,000 units respectively. 

Our take

• Egypt has exempted EVs, including imports, from customs duty, development fees and planning tax to promote their uptake. Instead of spending billions to subsidise locally-made electric cars, Egypt should consider tariffs on imports of EVs. This will achieve the same goal of protecting the local industry. 

• Local manufacturing of EVs will not add much value to Egypt’s manufacturing sector if most of the components are still imported. To be fair, the country has mandated at least 50% of the parts to be sourced locally. While this is a good start, a higher threshold will benefit the local economy more. 

• There is obviously demand for EVs in Egypt, and will keep growing in the coming years. The price point of between $10,000 and $15,000 for the soon-to-be-launched car will appeal to a lot of people. However, there is  an opportunity to make higher-priced models that will appeal to high-end users who also desire to buy a local EV.