Egypt Makes Giant Stride in EV Adoption, Establishes a $7.8M Worth EV Charging Stations Company
According to IEA data, sales of electric vehicles (EVs) more than doubled from the previous year in 2021, reaching a new high of 6.6 million. In 2012, only 120 000 electric vehicles were sold worldwide. In 2021, nearly 10% of global car sales will be electric; nearly four times the market share in 2019. This increased the total number of electric vehicles on the world’s roads to approximately 16.5 million, more than tripling the number in 2018. Global electric car sales have continued to rise strongly in 2022, with 2 million sold in the first quarter, up 75% from the same period in 2021.
Furthermore, the report stated that the People’s Republic of China will account for half of the increase in EV sales in 2021. In 2021, China sold more vehicles (3.3 million) than the rest of the world combined. After the 2020 boom, sales in Europe continued to grow strongly (up 65 percent to 2.3 million), and they increased in the United States as well (to 630 000) after two years of decline. Similar trends were seen in the first quarter of 2022, with sales in China more than doubling compared to the first quarter of 2021 (accounting for the majority of global growth), a 60% increase in the United States, and a 25% increase in Europe.
However, EV sales continue to lag in other emerging and developing economies, such as Africa, where EVs are still scarce, with a one-in-a-million chance of finding one. In South Africa, which is thought to have the continent’s largest EV market, only 1,000 of the more than 12 million vehicles on the road are EVs. Apart from the near unavailability of charging infrastructure, the few available models are still out of reach for most Africans owing to the lack of auto credit financing scheme in the continent.
Egypt Establishes EV Charging Stations Company
Hisham Tawfik, Egypt’s Minister of Public Business Sector, met with the founders of the “Egypt Electric Vehicle Charging Stations” company last week to follow up on the final procedures for establishing the company. Ayman Soliman, Executive Director of Egypt’s Sovereign Fund, Basel El Heni, Executive Managing Director of Misr Insurance Holding Company, and representatives of Hassan Group Allam Holding attended the meeting.
Misr Electric Vehicle Charging Stations Company intends to build and operate 3,000 dual chargers in the first 18 months, covering all highways and the governorates of Cairo, Giza, and Alexandria.
The Sovereign Fund of Egypt and the Misr Insurance Holding Group’s contributions are each worth 30 percent of the starting capital, while one of Hassan Allam Group company’s contributions is worth 20 percent, making the total capital valued at $6.2 million, which will increase after selecting the technical partner to reach $7.8 million.
The final procedures for the company’s establishment were followed up on during the meeting, as well as the updates and stages reached regarding the tender offered between companies qualified to operate, manage, and contribute to the company’s capital, which was extended until August 31 to allow for more time for receiving companies’ offers.
The winning company will assign a specialized consulting firm to select the EV stations’ sites from an initial list of more than 2,000 sites.
Egypt Joins MENA EV’s Adoption Push
Late last year, Egypt joined the Middle East’s push to adopt electric vehicles and tasked a state-owned company with developing affordable vehicles in collaboration with a Chinese firm while utilizing the country’s renewable energy boom to power them.
Public Enterprise Minister Hisham Tawfik in an interview with Blumberg at that time said that authorities are in contact with three potential companies as they seek a partner for El Nasr Automotive Manufacturing Co. on the 127 million projects. Production will begin in 2023, with output increasing to 20,000 units per year over the next three years.
According to Tawfik, Egypt’s electric model, which will be called either E70 or A70, will cost around $20,000, with half of the buyers likely to be taxi or Uber, drivers. That’s roughly the same price as Europe’s cheapest EV, Renault’s made-in-China Dacia Spring.
The private sector will also be offered a 40% stake in a new company formed to operate pay-to-use charging stations, with El Nasr taking 10% and a “state entity” taking the remaining half, Tawfik said without elaborating. The first 3,000 charging stations will be installed in Cairo and Alexandria before spreading to other cities.
“Egypt now produces all types of clean energy,” the minister said, referring to the country’s substantial wind and solar power projects. “This means we have the infrastructure to take the automotive industry into the future.”
It’s an ambitious project for the Arab world’s most populous nation of more than 100 million people, where Tawfik estimates only about 350 electric cars ply the busy streets. That’s a tiny fraction of the roughly 5 million private cars registered, though financial incentives offered to owners of standard cars to convert them to natural gas will be extended to EVs to encourage purchases.
National Strategy
The Egyptian government intends to increase the use of alternative fuels to reduce reliance on conventional fuels such as gasoline and diesel by introducing electric and hybrid vehicles in both public and private transportation, with a greater emphasis on converting more vehicles to run on natural gas.
President Abdel Fattah El Sisi has directed that all public buses be converted to run on natural gas to reduce carbon emissions and to encourage more citizens to convert their cars through 71 centers spread across 22 governorates. According to Prime Minister Mostafa Madbouly’s press statement, the Cabinet is collaborating with the Ministry of Petroleum and Natural Resources, through the Natural Gas Vehicles Company (Car Gas) and the Egyptian International Gas Technology Company (GASTEC), to complete the transformation.
Furthermore, the President has requested that the EV industry be localized, and a recent agreement with Mercedes-Benz not only signaled the German giant’s return to Egypt but will also introduce locally-assembled EVs to the market. Another agreement with China will see the Ministry of Military Production manufacture 2,000 electric buses in Egypt in collaboration with China’s Foton Motor, the company that will deliver 50 electric buses to Egypt later this year.
The Cabinet met in July to discuss updates on the hybrid and bi-fuel conversion programs, as well as the expansion of natural gas filling stations. Because natural gas is a cleaner fuel, the Egyptian government anticipates that these plans will have a positive economic and environmental impact. Switching to natural gas reduces carbon monoxide emissions by 86%, carbon dioxide emissions by 21%, sulfur dioxide emissions significantly reduce, and lead emissions are eliminated. This has the potential to reduce pollution and improve air quality, particularly in the congested capital of around 20 million people.
Furthermore, a presidential decree issued in 2018 exempted electric vehicles from customs and granted NGVs a 35% tariff reduction. Furthermore, the Ministry of Finance has set the duty on imported electric cars at as little as 0.9, and the Ministry of Interior announced in May that it would issue temporary registration plates to electric car owners until the necessary regular procedures are completed.
According to Blumberg’s report, by 2040, most cars on the roads globally are expected to be electric, with a dozen countries, led by France and the United Kingdom, already committing to phase out and ban fossil fuel vehicles by that time to meet the Paris Climate Agreement targets. Meanwhile, Egypt appears to be catching up with the global trend. Combating climate change, reducing emissions, and reducing air pollution are among the goals of Egypt Vision 2030, the country’s national sustainable development strategy.