Egypt plans to produce and launch the first electric car in early 2027.. What are the most important challenges?

Egypt has begun production of the electric vehicle “MAGE EV” within the factories of Al-Nasr Automotive Manufacturing Company, in partnership with the private sector, in a step aimed at localizing the electric vehicle industry and increasing the local component, with plans to begin putting it on the market in early 2027. The project’s ability to build an integrated local industry remains dependent on the expansion of component manufacturing and the development of the infrastructure necessary for the spread of electric vehicles.

The Egyptian Minister of Industry, Khaled Hashem, announced that the project represents a step to localize automotive industry technology and enhance national industrial capabilities, noting that the ministry is working to develop the national program for the development of the automobile industry, and to increase the incentives directed to feeding industries, in a way that supports raising the local component, as well as expanding the manufacture of batteries, engines, and electronic components, as they represent one of the main paths to building an integrated industry and integration into global supply chains. The car, belonging to the Chinese brand "Dongfeng Meg", is scheduled to be put on the market in early 2027, with a target local component percentage of 45%. SN Automotive is the local agency for the brand, in partnership with Al Safi Group, within the factories of Al Nasr Automotive Manufacturing Company.

For his part, the Egyptian Minister of Electricity and Renewable Energy, Mahmoud Esmat, said that the production of the car comes within the efforts of Al-Nasr Company to develop and modernize its production lines, with the support of the political leadership to localize the electric vehicle industry, noting that the percentage of the local component in the buses produced by the company exceeds 60%, stressing the importance of expanding the establishment of electric car charging stations and their spread throughout the republic to support the spread of this type of vehicle. Commenting on the project, Secretary General of the Association of Automobile Manufacturers, Khaled Saad, said that expanding the production of electric cars locally could contribute to reducing dependence on foreign currency and reducing the cost of production, noting that the car is scheduled to be put on the market during January 2027, and that showrooms and distributors are preparing to market it through different geographical distribution networks.

Saad added, in exclusive statements to Ofek News in Arabic, that targeting a local component percentage of 45% represents an important step, but manufacturing batteries locally will represent a greater shift in deepening the industry, explaining that the battery represents about 60% of the components of the electric car, indicating that Egypt has not yet begun producing electric car batteries, although there are plans by some factories to enter this field. Saad estimated the number of electric car charging stations in Egypt at approximately 300 to 400 nationwide, with most of them concentrated in Cairo, considering that their limited spread represents one of the challenges facing the expansion of the use of electric cars. Likewise, the duration of charging a car ranges between half an hour and an hour and a half, and may reach two hours depending on the capabilities of the charging station. However, the possibility of home charging helps reduce dependence on public stations.

Regarding the operating cost, Saad said that electric cars save the consumer about 60% of operating and maintenance costs compared to traditional cars, given that they do not require changing oils and water or performing maintenance work associated with internal combustion engines. But he pointed out that the high prices of spare parts still represent a challenge for consumers, even though the breakdowns appear to be limited, explaining that the newness of electric cars in the Egyptian market does not allow judging their breakdown rates in the long term, as some problems may appear after three or four years of use.

For his part, Montaser Zaitoun, a member of the Board of Directors of the Automotive Division of the General Federation of Chambers of Commerce, said that the project will not lead to a significant reduction in the import bill for cars and their components during the current stage, as long as it remains dependent on current suppliers without adding new production lines to manufacture components locally, indicating that the real added value is achieved through establishing factories and production lines for feeding industries and increasing the proportion of the local component. Zaytoun explained that developing an exportable electric car industry requires the percentage of the local component to exceed 50%, and reach about 55%, citing the experience of electric buses in which the percentage of the local component reaches 70%, and which are exported to Arab and European markets, indicating that the company needs to prepare larger quantities of cars before expanding the offering and forming a distribution network capable of marketing the car.

Regarding the cost of production, Zaytoun said in exclusive statements to Ofek News in Arabic that the government is considering reducing or eliminating customs duties on components of the production of electric cars, explaining that imported electric cars enter without customs, while components of the production of locally assembled cars are subject to duties amounting to 7%, explaining that the entry of Al-Nasr Company into the project in partnership with the private sector may have shed light on this disparity in customs treatment, but he does not confirm that this is the reason behind studying the modification of duties. Zaytoun stressed that the spread of electric cars requires the expansion of charging stations and providing compatibility between different charging protocols, noting that the failure to operate the Chinese protocol alongside the European one represents a challenge to the use of new cars, especially since the car in question is of Chinese origin.

He explained that the percentage of people buying electric cars ranges between 5 and 10%, according to his estimate, noting that the low costs of regular maintenance represent an advantage for these cars, but the high prices of spare parts are still one of the factors that affect the purchasing decision. He pointed out that the current incentives include customs exemptions for imported electric cars and a reduction in licensing fees, but he believes it is necessary to provide additional incentives for investment in charging stations, in a way that improves the economic feasibility of the projects and encourages their increased spread.