Ready for electric cars?

Khaled El-Ghamry, Saturday 8 Jan 2022

Electric cars are becoming more and more popular as a means of combating climate change, but when will they be embraced by Egyptian consumers?

Ready for electric cars
Ready for electric cars

British Prime Minister Boris Johnson announced in November that electric vehicle (EV) charging points will soon be mandatory in new buildings in the UK as part of efforts to move away from fossil fuels and to tackle climate change.

He also said that new cars solely powered by petrol or diesel would not be sold in the UK from 2030.

While Egypt may not be immediately following in the footsteps of the UK and other countries, it is also moving towards electric cars.

EV charging stations are being built across the country, and these should reach 3,000 by 2023, helping electric car owners to feel reassured about using their cars for long distances. The country has also been successfully operating electric modes of transport as a first step towards encouraging the use of private electric cars. It is trying to persuade taxi-drivers to purchase electric cars at reasonable prices.

State-owned El-Nasr Automotive was already on a course to locally assemble an electric car with China’s Dongfeng, however in November the Ministry of Public Enterprise announced negotiations with the Chinese company had stopped over differences related to pricing of the imported components. The ministry said it was in the process of exploring other partners.

Emad El Shorbagy, chairman and managing director of the El Ezz for service centers, one of Ezz El Arab Automotive Group companies, said that electric cars have many advantages. They are economical and consume less energy, with every six hours of charging consuming between six and eight kWh of electricity at a cost of LE20 and enabling the car to travel 120 km.

This means that electric cars save up to 75 per cent on the cost of the petrol used by conventional cars, and they do not need the additional costs of changing engine oil and maintenance.

If 25 per cent of cars running on petrol or diesel in Egypt were converted, the treasury would be able to save fuel subsidies of LE4 billion annually. The figure would rise to LE6 billion if 50 per cent of cars were converted, and LE13 billion if all cars were converted, El Shorbagy said.

He said that the currently higher price of electric cars could be made up for through the low cost of their maintenance and lower fuel consumption.

The cost of manufacturing electric cars is declining, with prices decreasing by up to 70 per cent from 2010 to 2017. With the continuing technological development in this field, it is expected that electric cars will be less expensive than petrol-run cars in the near term, he added.

At present, the spread of electric cars depends on encouraging customers to buy them. They are often seen in the streets of countries whose governments offer support to buyers, El Shorbagy said, adding that if this support is withdrawn, the demand for electric cars will drop.

China, the largest market for electric cars in the world, saw a 16 per cent decline in sales after the government reduced subsidies. The same thing happened in Europe, where demand for electric cars dropped in Denmark after the cancellation of subsidies in 2016.

The size of the electric cars market in Europe remains marginal, and this has not encouraged companies to compete. Even so, the German Volkswagen company has spent more than 30 billion euros developing its electric car family.

Companies at present are developing electric cars because they want to be present in the market before its anticipated expansion, and they need to adhere to strict European environmental standards to avoid paying fines.

El Shorbagy said the spread of electric cars in Egypt faced obstacles, such as the lack of standard specifications that makes the licensing process difficult.  

Electric cars are not licensed according to their cubic capacity (CC), so some traffic departments have formed technical committees to calibrate the motor and decide its equivalent in CC. El Shorbagy added that it is imperative that the infrastructure for the charging and maintenance of such cars be extended in Egypt.

Electric cars are also complex and cannot be repaired by simple procedures. Gone are the days when people could repair their cars themselves, and unlike for fuel-run vehicles, electric cars cannot be made to operate using charging cables if they come to a complete halt.

Attempts to assemble electric cars in Egypt to decrease their cost and enable them to compete with petrol-run vehicles may not be fruitful because local components have to make up at least 45 per cent of the cars to receive incentives. This is difficult due to the complexity of manufacturing electric cars, and local components, at least at first, may be very limited.

Manufacturing electric vehicles faces challenges on a global scale, affecting the ability to produce them locally and internationally, El Shorbagy said.

The challenges include the cost of projects relating to developing electric cars and the laying-off of existing workers. The German company Daimler, which owns Mercedes-Benz, laid off 10,000 employees worldwide in 2019. The move came days after rival Audi announced it would lay off 9,500 of the 61,000 workers it has in Germany for similar reasons.

The cost of research and development is exorbitant when compared to the number of electric cars produced, and some leading companies have merged or cooperated with others to reduce costs.


There are also environmental problems associated with manufacturing electric cars.

Although the world is trying to eliminate polluting emissions, it is encountering another environmental challenge with electric forms of transport as the production of lithium ion batteries used in them requires the use of lithium, a non-renewable material.

Lithium is not the only rare material used in the manufacture of batteries. Dysprosium, lanthanum, neogenium, praseodymium and cobalt are also used, and they can be harmful to human health and the environment and are difficult to dispose of or recycle.

Sources of electricity may also not be environmentally friendly. While cars do not produce emissions, the electric power they use may be produced from non-renewable sources harmful to the environment. Many governments are trying to make sources of energy available that are environmentally friendly, but this is moving very slowly.

Mohamed Ghoneim, vice chair of the Great Automotive for Trading and Industry Company, believes that electric cars will not spread in Egypt for 10 years at least, but that the country may see a limited spread in the next six years, though even then an electric car will not be an individual’s main mode of transport.

Electric car importers make up a small group that cannot supply the Egyptian market with a sufficient variety of vehicles or after-sales services of spare parts and maintenance, he said.

In addition, electric cars are expensive, with those imported from China ranging in price from LE400,000 to LE500,000. Leading auto companies and agencies in Egypt are not playing their part, and consumers do not find the diversity and quality they are looking for, Ghoneim said.

Moreover, the agencies, unlike their European and American counterparts, are not cooperating with the government to build EV charging stations and increase consumer awareness about the importance of electric cars.

Sherif Fahim, marketing manager of the Egyptian International Motors Company (EIM), the Renault agent in Egypt, believes that electric cars will not spread in Egypt in the near future because the technology is new and expensive and is not suitable for all social brackets.

Moreover, there is not enough diversity in the market to encourage buyers, he said.

There are insufficient charging points, with distances between them being long, and the hot weather calling for the use of air conditioners. These are all factors that affect battery consumption and make the use of electric cars over long distances unviable at present, Fahim said.

The government is working on increasing charging points and supporting the infrastructure necessary for the spread of electric cars. However, these efforts have not been enough to convince the public to replace their petrol-run cars with electric ones.

Some auto agencies display electric car models, but they do not attract buyers, and this means there are few incentives to continue. An expert on electric cars who preferred to remain anonymous said increasing the sales of electric vehicles was being resisted by the giant auto companies, which do not want to sell electric cars because they cost more and bring in fewer profits.

Increasing the sales of electric cars begins with encouraging both the consumer and the investor, changing the idea consumers might have of vehicle use, and explaining the advantages of them, he said.

Egyptian consumers often regard vehicles as assets, which is a notion that does not apply to electric cars whose technology may be speedily upgraded. This means their resale value is lower. On the upside, electric cars do not have a motor that requires changing the oil, do not produce noise, do not need their brake pads changing often, and have batteries guaranteed for eight years.

The expert said the government should offer incentives to consumers to encourage them to buy electric cars. These could be in the form of financial support, as was the case in Germany where buyers received a discount of 4,000 euros shouldered by the government.

There should be binding laws and inventive packages for investors in the electric cars market, such as designating certain tourist areas and education complexes that can be accessed only via electric cars, he said.

Regarding supporting industries that complement manufacturing, Egypt’s Electricity Authority could partner with private-sector companies to produce chargers, as has been the case in Morocco, which within a period of five years was able to construct factories exporting components.

A following step would be localising the industry and building factories to manufacture electric cars.

The state is expected to lay out a strategy for electric cars by the end of the year, an urgent step because by 2030 the manufacture of fuel-run vehicles will largely come to a halt. One leading Egyptian auto company has already taken the first move by preparing to import electric cars and building a factory to make components.

*A version of this article appears in print in the 6 January, 2022 edition of Al-Ahram Weekly.

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