Egypt: Baby steps for electric Vehicles

Bassem Aly , Friday 21 Feb 2020

Al-Ahram Weekly looks at how electric vehicles are catching up in the Egyptian market

Baby steps  for EVs
The infrastructure for electric vehicles is being rolled out

Earlier this month, Cairo’s first electric public bus began running between Abdel-Moneim Riad Square in downtown Cairo and New Cairo. Operated by joint-venture transport service-provider Mowasalat Misr, the so-called X-bus charges LE25 per ticket. For those holding the company’s smart card, tickets are LE18. The bus is air-conditioned, environmentally friendly, and makes trips in each direction.

The new buses are part of a larger effort by the government to encourage electrically operated vehicles. At the outset of February, President Abdel-Fattah Al-Sisi in a meeting with Prime Minister Mustafa Madbouli and the ministers of military production, finance, public enterprise, transport, and trade and industry stressed the importance of paying more attention to this industry. He called for establishing a regional centre for manufacturing and exporting electric vehicles in cooperation with global automakers.

Within that framework, Public Enterprise Minister Hisham Tawfik said last month that Egypt and China would sign agreements to increase the use of EVs in Egypt. “Egyptian and Chinese officials have exchanged visits to discuss cooperation agreements that will be signed in 2020 to begin the use of electric vehicles in Egypt,” said Tawfik.

The private sector will be allowed to build charging stations, he added, noting that experts from China and Egypt had agreed that building such stations should precede the use of electric cars on Egypt’s streets. Revolta is the first company building a network of charging stations in Egypt and has more than 130 such stations in 18 cities. The first EV charging unit was inaugurated on the Cairo-Suez highway in February 2018.

According to Tawfik, the plan is to have 1,000 fast electric charging stations across the country within the coming three years. The process will also target white taxis in Cairo, which currently run on petrol and diesel fuel.

MP Ibrahim Hegazi, a board member of the state-owned Al-Nasr Automotive Manufacturing Company, praised the push by the president to encourage the use of electric cars. “The government is doing a great job in looking to the future,” he said. But the state cannot do everything,” he added.

Hegazi believes that people are “happy” with petrol vehicles. Persuading them to buy EVs would require a comprehensive strategy to raise awareness of the new vehicles, market them, and address technical concerns.

He is concerned about changing Egyptian consumer behaviour towards the new vehicles. Consumers would need to be attracted enough to the new cars for them to go to dealers and ask about EVs, he noted. Only then would traders start providing the market with EVs, he explained. Launching EVs in Egypt would require an awareness campaign, explaining the pros and cons to the public as well as the differences between them and a petrol-driven car, Hegazi said.

As far as incentives were concerned, lifting tariffs would not be enough, he said. In September 2018, Egypt had decided to exempt EVs from custom duties, only collecting value-added tax. Tariffs were also reduced for hybrid vehicles operating on electricity and petrol.

Abdel-Kader Talaat, a member of the Automotive Marketing Information Council (AMIC), believes there are multiple benefits to EVs. “They are faster, safer and more economical than petrol vehicles,” he said. He was not worried about spare parts, saying that car manufacturers would provide parts for EVs like for any other car.

However, EVs will not be affordable to everyone, at least not at the outset, he said. Electric car prices stood at around $56,000 in 2019. While this is 13 per cent cheaper than the previous year, according to data provided by Cox Automotive, a US research institution, at a price close to LE1 million, this would be out of the reach of most Egyptian consumers.

Tawfik had been quoted as saying that the government’s goal was to make an Egyptian-made EV priced at LE50,000, noting that investors would also receive incentives to manufacture at least 100,000 vehicles.

Dealers, meanwhile, are in a wait and see mode. Several car-dealers speaking on the condition of anonymity to Al-Ahram Weekly said they had no plans to sell EVs. One of them said he might consider doing so in April, though he stressed that he would need further details, including pricing. Another said he would not be willing to do so anytime soon.

Speaking to the Weekly, Ahmed Zein, marketing manager and a board member at Revolta Egypt, said there was nothing to be afraid of about EVs. Regarding spare parts, he said there was a need to differentiate between two types of EV. The first type includes those produced by companies that also make petrol cars, and these companies will offer spare parts for their EVs just like they do for their other cars.

The second type involves EVs that are produced by companies that do not also produce petrol cars such as Tesla. In the latter case, spare parts are imported from Jordan. According to Zein, Egypt has a limited number of EVs, unlike in Jordan, and it would not be profitable, at least for now, to establish maintenance centres, especially if vehicles do not have regular checks, he noted.

Zein agreed that the cost of the battery in an EV was high, though he said that the battery “serves as the engine” in an EV. Just like regular engines in which parts wear out in time, damaged cells are changed in EV batteries. The battery has an eight-year warranty, Zein said, adding that this was “not a short period of time” and that it might continue to function normally for 10 or 12 years.

Zein, who personally owns three EVs and has recently established a company that operates EV taxis, said riding in an EV was “indescribable”. For him, an EV’s “performance is 100 per cent better” than a petrol vehicle. “An EV gives you the performance of a sports car. Once you press the pedal, the car’s speed jumps from 0 to 100 in no time.” This doesn’t happen with all petrol cars, he said, also noting the quietness of the process.

An EV is also “10 times less likely to catch fire” than a petrol vehicle, Zein said. “This is because an EV has no inflammable petrol in it and is an extremely technologically advanced vehicle. The manufactures have invested heavily in the safety of this car,” he noted.

“My EV has a mileage of 50,000 kms, and I have not had any need of spare parts. The problems that emerge in vehicles because of the petrol, including to the brakes, are not there,” he emphasised. 

In addition, an EV can save money, Zein noted, adding that his monthly electricity bill had not increased significantly as a result of his charging his EVs. He said he charges his three EVs at home for almost LE800 per month. “You have to pay a lot more to put petrol in cars,” Zein argued.

Charging the cars is also convenient and possible in various ways. One way was “as if you are charging a laptop at home” in a slow-charging system that takes eight hours. A second type consists of charging systems located in public places such as social clubs and restaurants, which can charge an EV in one to three hours depending on its condition.

 Finally, the owners of EVs can go to fast-charging stations to charge their cars within 30 minutes. Except for Upper Egypt, there are charging stations located along all the highways and roads in the country.

Prices of EVs start at LE250,000 for second-hand ones. New EVs cost at least LE500,000. Tesla cars, made by the pioneer of EVs, range from LE1 million to LE2 million, Zein concluded.

*A version of this article appears in print in the 20 February, 2020 edition of Al-Ahram Weekly.


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