Egypt to launch strategy to develop auto industry, encourage electric vehicle manufacturing

Ahram Online , Thursday 10 Mar 2022

Egypt is preparing to launch the national strategy for developing the automotive industry, which includes incentives to locally manufacture electric vehicles, the Cabinet has announced.

Egypt s Prime Minister Mostafa Madbouly reviews the national strategy for developing automotive indu
Egypt s Prime Minister Mostafa Madbouly reviews the national strategy for developing automotive industry in a Cabinet meeting, 10 March 2022. Egyptian Cabinet

The Cabinet did not specify a date for the launch of the strategy, which was initially set to be launched by the end of 2021.

A Cabinet meeting on Thursday, chaired by Egypt’s Prime Minister Mostafa Madbouly, reviewed the final formulation of the strategy, through which Egypt will establish itself as a main gateway for emerging vehicle markets in Africa, Cabinet spokesman Nader Saad said in a statement.

Egypt will also seek, through the strategy, to build strong commercial and investment relations with the main regional trade partners to ensure sustainable development growth for the two sides.

This will be achieved by formulating a comprehensive and integrated industrial policy to attract new investments in the vehicle industry, Saad said.

The initial scope of the Egyptian Automotive Industry Development Program (AIDP), which is part of the strategy, includes providing the required framework to develop existing car assembly and manufacturing capabilities and encourage new investment in this sector, Saad said.

Vehicles that will be assembled under the umbrella of this program will include passenger cars as well as SUVs, vans, and microbuses, Saad explained.

The program also provides incentives for the localisation of electric vehicle manufacturing, including incentives for manufacturers and consumers of electric vehicles manufactured locally.

Benefits provided to locally-produced electric car owners mainly include a cash incentive worth a maximum of EGP 50,000 and an already-applied exemption from the vehicle license tax and the state resource development fee.

The program also requires real estate developers to secure specific numbers of electric car charging points in residential and commercial projects, Saad added.

The strategy, which is line with the rules of the World Trade Organisation (WTO), seeks to attract further investments in the vehicle industry in Egypt, create job opportunities, secure hard currency, and develop a competitive vehicle market, Saad said.

Participation in the program is optional and is open to manufacturers willing to benefit from the benefits it provides and to abide by its rules, Saad said.

The government makes sure to provide the appropriate environment for the development of the automotive industry in the long term, Saad said, affirming that the private sector constitutes an effective partner in economic development.

In December, Egypt asked the representatives of US multinational automotive giant General Motors (GM) and Al-Mansour Automotive Company to submit a comprehensive study on their plans to manufacture electric vehicles locally, as they plan to launch eco-friendly electric vehicles in the country in 2022.

Earlier in the same month, GM and Al-Mansour signed a memorandum of understanding (MoU) to study joint manufacturing of electric vehicles in Egypt.

Egypt has worked on plans sponsored by President Abdel-Fattah El-Sisi to localise environment-friendly cars, reduce dependence on fossil fuels, and keep pace with global progress in the automobile industry.

Egypt will manufacture its first electric vehicle in 2023 as part of the state’s efforts to transition towards a green economy, El-Sisi announced in January during a World Youth Forum panel discussion.

Egypt also plans to start mass production of Egyptian-Emirati bi-fuel pickup vehicles, running on gasoline and natural gas, by the end of the first half of 2022, Egypt’s Minister of Military Production Mohamed Ahmed Morsi said in December.

In July, Egypt inaugurated the first integrated fuel station in Cairo’s Abbasiya district to serve vehicles running on natural gas, gasoline, and electric charging, with plans to set up a network of 3,000 electrical-charging stations in the near future.

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