{"id":572089,"date":"2020-06-10T04:04:40","date_gmt":"2020-06-10T04:04:40","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/is-egypt-ready-for-electric-vehicles\/"},"modified":"2020-06-10T04:04:40","modified_gmt":"2020-06-10T04:04:40","slug":"is-egypt-ready-for-electric-vehicles","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/is-egypt-ready-for-electric-vehicles\/","title":{"rendered":"Is Egypt ready for electric vehicles?"},"content":{"rendered":"

<\/a> Is Egypt ready for electric vehicles?<\/strong> Over the past year, the Madbouly government has enacted policies to encourage the embryonic electric vehicles market in Egypt. The move makes sense in the long term for both the government and consumers in an age of fuel subsidy cuts and climate change. The covid-19 pandemic will take a toll on the electric vehicle (EV) sector as worldwide sales fell 45%<\/a> in January and February, mainly over the lockdown in China \u2014 the largest consumer EV market. In Egypt, we\u2019re at such an early stage of development that covid is just a blip.<\/strong><\/p>\n

We have a long way to go before we see a thriving EV market here:<\/strong> Egypt has been lagging in the shift towards EV in general, Khaled Saad, Secretary General of the Egyptian Association of Automobile Manufacturers, told Enterprise. Only 150-200 EV are currently roaming Egypt\u2019s streets<\/strong>. He identifies three main challenges hindering the growth of the Egyptian EV markets: Demand has been low; licensing, regulations and legislation for the sector is challenging; and charging stations are few and far between.<\/p>\n

The global prices of EV are higher than traditional-fuel-powered cars<\/strong>, Saad said. \u201cAbout 70% of Egyptian car sales retail in the EGP 200-300k range, while reliable EV are sold at just below EGP 1 mn,\u201d he explained.<\/p>\n

Plus, getting a license plate for an EV is challenging:<\/strong> Egypt still lacks a permanent framework for licensing imported EV, which has been stuck in the pipeline since December 2018<\/a>. Saad explained that the size of an engine in cubic centimeters is still a critical factor when assessing duties on an imported car \u2014 and EVs simply have no engine. The Interior Ministry has been offering temporary license plates and registration<\/a> for EV owners as a workaround, but it\u2019s not a long-term solution. Saad estimates that on average of one car is licensed every month across the country.<\/p>\n

So you\u2019ve successfully managed to import a Tesla. How do you charge it? <\/strong>A typical EV would allow you to charge batteries either through plugging it directly into a wall outlet, which could take around 12 hours, or use one of the fast-charging stations that gets the job done in about 20-30 minutes. This may sound short, but if you drive your EV to a charge hub and find two cars lined up, this could potentially be an hour-and-a-half wait time. More worrisome, where do you even know where to find these charging stations?<\/p>\n

Enter the private sector: <\/strong>Revolta Egypt is one of the first Egyptian outfits specialized in EV and inaugurated in February2018 what it said is the<\/a>country\u2019s first EV charging points<\/a> on the Cairo-Suez highway. The company has now completed 87 charging stations<\/a> across the country, with plans<\/a> to bring that figure to 690 this year.<\/p>\n

We also have Infinity Energy, which has earmarked a USD 60 mn investment<\/strong> from the European Bank for Reconstruction and Development<\/a>for EV charging stations<\/a>. Infinity has since set up 25<\/a>, mostly in Cairo and Giza, and plans to bring the total number<\/a> of EV charging stations to 100 by the end of the year. The company was unfazed by the pandemic and opened up its first charging station<\/a> in Alexandria last month.<\/p>\n

Where can you find them?<\/strong> The two companies have deployed over 100 charging stations across Egypt in about two years. Though mostly in Cairo and Giza, there are others in Alexandria, the Delta, Sinai, and along the Red Sea coast, according to EV locator service Plug Share<\/a>.<\/p>\n

Multinationals are also looking to help, including Schneider Electric<\/strong>, which has been helping companies develop programs for public charging solutions that can be monetized. The company is also helping businesses that run EV fleets reduce total operating costs, Schneider Electric's Regional President of Egypt, North East Africa, and the Levant, Walid Sheta, told Enterprise. He explained that the cost of battery storage has been projected to decrease to USD 200 kW\/h this year from USD 1,000 per kW\/h in 2010. Running costs are also much lower, and can save owners thousands of USD a year through savings on fuel and maintenance.<\/p>\n

The public sector is also seeing the potential: <\/strong>Most recently, the Public Enterprises Ministry has been exploring ways<\/a> to build EV charging stations in Cairo.The National Authority for Military Production<\/a>also signed<\/a> an MoU with China\u2019s SSE International and Marathon International Technology to begin local production of the stations. And the government itself<\/a>plans to build 1k fast charging stations<\/a> in the next three years, Public Enterprises Minister Hisham Tawfik had said.<\/p>\n

What else has the government been doing to get EV infrastructure ready? <\/strong>The Electricity Ministry is working on developing the infrastructure to actually bring power to charging stations, and is working on setting the tariff for charging. It\u2019s not possible for the government to subsidize EV charging, Minister Mohamed Shaker<\/a>previously said<\/a>, but it can at least ensure electricity is more steadily available.<\/p>\n

The government has also taken the right steps towards stimulating demand by offering conditional customs exemptions<\/strong><\/a><\/strong>on new and used EV imports.<\/a><\/strong> Other companies are focused on importing salvaged EV<\/a>s and selling them directly to Egyptian customers for a fraction of the price. Once the cost is brought down in a couple of years, demand will begin to grow faster, Sheta tells us.<\/p>\n

The Finance Ministry, meanwhile, is attempting to support the transition toward EVs by <\/strong>simplifying and cutting the cost of licensing and taxes<\/a><\/strong>.<\/a> Moreover, the Public Enterprises Ministry will stimulate the local manufacture of EV by requiring public authorities, economic bodies, and public sector companies to replace 5% of their fleet every year with electric cars. To make the market even more attractive, the government had pledged to subsidiz<\/a>e<\/a> the costs of the first 100k locally-produced cars up to EGP 50k per vehicle, on the condition that the cars are able to cover over 400 km per charge.<\/p>\n

These plans have taken a backseat because of covid-19: <\/strong>The government had planned to enlist China to build a national EV industry. When China went into a complete shutdown, so did all pending partnerships. The National Organization for Military Production had signed an MoU with China\u2019s Geely<\/a>to manufacture EV locally<\/a> and the Public Enterprises Ministry had reached<\/a>a similar agreement<\/a> with a Chinese auto company. The private sector was also keen on seizing the potential. The local distributor of China\u2019s Dongfeng cars, Dershal, had invested USD 53 mn<\/a>back in 2018<\/a> to begin assembling electric cars in Egypt before their plans stalled. These agreements have all stopped as the world braced to fight the pandemic and the economic turmoil that followed, Public Enterprises Minister Hisham Tawfik told Enterprise. El Nasr Automotive, however, was able to restart talks<\/a> with Wuhan-based Dongfeng after negotiations were halted temporarily.<\/p>\n

From the consumer side, you can\u2019t hurt what\u2019s not there:<\/strong> Aside from freezing projects, the pandemic would, most likely, not impact the EV market growth simply because there is almost nothing to hurt, Khaled Saad told Enterprise.<\/p>\n

But in crisis, change may come:<\/strong> In times of crisis, customers often look for alternatives, EV advocate and Electrified<\/a> founder Ayman Mohamed told Enterprise. Customers must be made aware of all the advantages that EV can offer and once they do the market will become self-stimulated and shift to a higher gear. \u201cWhen the LED lighting technology was first introduced at a high price, Egyptians were reluctant to buy until it became clear that investing in an LED light saves them money on the monthly electricity bill and cost of change when the traditional bulbs are busted,\u201d he said. The same goes for EV that do not break down as often and in the long run, would save customers from an increasingly less-subsidized and pricier fuel.<\/p>\n

Although Egypt is still a long way away from establishing a thriving EV market,<\/strong> the right steps are being taken to speed its development along by both the government and the private sector. Once a critical mass of users is reached in a couple of years, the ownership costs of EVs will be lower than costs of traditional cars, which would bring down the investment cost of EV to a point whereby they will become affordable for more customers in Egypt, Sheta tells us.<\/p>\n","protected":false},"excerpt":{"rendered":"

Is Egypt ready for electric vehicles? Over the past year, the Madbouly government has enacted policies to encourage the embryonic electric vehicles market in Egypt. The move makes sense in the long term for both the government and consumers in an age of fuel subsidy cuts and climate change. 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