Egypt to reveal policy for growth of EVs

From the newsletter

The Egyptian government will today outline its policy & strategy on supporting the shift towards EVs. Legislators have summoned Prime Minister Dr. Mostafa Madbouly to the Senate to give the State’s position on 8 key issues essential in supporting e-mobility in Egypt. The legislators say Egypt is lagging in implementing EV policies. 

• Egypt already has numerous policies that were introduced within the last decade to support the growth of its automotive industry, including the local manufacture of EVs and hybrids.

• Legislators are however raising questions over the slow pace of implementing these policies, which is derailing the country’s transition towards cleaner mobility solutions.

More details

• Some of the key issues the Egyptian government will address are customs exemptions and financial incentives to encourage citizens to buy these cars, developing the infrastructure and expanding the establishment of charging stations and legislation necessary for the transition to EVs.

• It will also speak on increasing community awareness of the importance and benefits of using electric cars, encouraging local production to localize the electric car industry and feeder industries, and qualifying the human element and providing specialized maintenance centers for electric cars.

• Lastly, the government will outline its strategy on investing in research and development in the field of electric car technology as well as its plan to replace its fleet of cars with electric cars.

• Manufacturing of EVs in Egypt is currently regulated by the Automotive Industry Development Strategy (AIDS), which was introduced in 2016. The strategy outlines Egypt’s plan to develop its local EV manufacturing capabilities.

• This strategy is supported by various laws governing related aspects, including the Investment Law of 2017, the Customs Law of 2020, the Environmental Law of 1994 and the Electricity Law of 2015.

• The Egyptian government currently provides various incentives to its local EV sector, including tax deductions and customs duty exemptions to encourage the purchase of EVs by locals. It is also investing in the development of a nationwide network of charging infrastructure to support the growing EV demand.

• Egypt has a plan in place to put a ban on traditional petrol and diesel cars by 2040 as part of its Vision 2030 strategy. This move aims to reduce greenhouse gas emissions from its energy sector by 10% by 2030. Ethiopia became the first country in the world to ban imports of fuel vehicles in January 2024. 

Our take

• Egyptian policymakers have neglected non-financial incentives and information and awareness policies. These oversights should be addressed as Egypt still has low adoption rates for EVs, despite the considerable market potential and anticipated benefits. 

• The Egyptian government offers subsidies of up to EGP50,000 ($2,500) on the purchase of locally manufactured EVs. While this financial incentive is very important, it could also be applied to imported EVs to foster overall market demand.

• Egypt still relies on foreign expertise and components in its local EV industry. To support the local industry and create jobs, the country should grow its human capacity and local component manufacture to reduce the risk of external shocks.