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Wednesday, 29 July 2020

The next step in our journey to an EV future will cost about EGP 500 mn

INVESTMENT WATCH- The next step in our journey to an EV future will cost about EGP 500 mn: The plant that will eventually assemble 25k electric vehicles a year in partnership with China’s Dongfeng Motor Corporation will cost EGP 500 mn to get off the ground, Public Enterprises Minister Hisham Tawfik was quoted as saying by Al Mal. Under the MoU signed late last month between the Chinese firm and the Metallurgical Industries Holding Company, production is slated to begin in the last quarter of 2021 at facilities owned by El Nasr Automotive.

We’ll know more soon about the government’s plan to roll out EVs around the country: Tawfik recently handed documents to the presidency outlining a national incentives strategy for the production and ownership of EVs, he said, adding that the cabinet will issue a statement soon with more details. Incentives involve a set price for charging the vehicles, agreements with private mall operators to set up charging docks, and subsidies of around EGP 50k per vehicle. Tawfik first announced the subsidies, along with a three-year plan to build 1k fast charging stations, earlier this year. Alongside those measures, public authorities, economic bodies, and public sector companies will be required to replace 5% of their fleet every year with electric cars, Tawfik also said recently.

Background: We noted last year that the government is working on a new policy framework to encourage the use of EVs under instructions from President Abdel Fattah El Sisi. We also looked into whether Egypt is actually ready to embrace a market for EVs in a recent edition of Hardhat, our weekly infrastructure vertical.

Also in the pipeline — funding for electric taxis: The Public Enterprises Ministry is planning to roll out a program to provide financing for electric taxi purchases, Tawfik said. Details on the program are also due out soon, he added, hinting that there could similarly be a separate financing program for purchases of personal EVs.

In related news, Tawfik held talks yesterday with the Chinese ambassador in Cairo Liao Liqiang on collaboration in EV manufacturing. The two agreed to compile a shortlist of potential Chinese partners to work with the government on its EV development plan, according to Masrawy. They also discussed the MoU with Dongfeng, plans to concentrate Egypt’s EV efforts in facilities owned by El Nasr, as well as have the state-owned company act as an agent for Chinese EV makers, and cooperation in manufacturing key EV components through “multiple forms of partnership” with a Chinese company leading in the field. There was no mention of the latter company’s name nor specifics on the potential partnership.

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