Egypt partners with second largest Chinese automaker for new EV push

Under the deal, a subsidiary of Egypt’s GV Investments will begin local production of China FAW Group’s cheapest model in the first quarter of 2025, according to Sherif Hamouda, chairman of the Cairo-based firm. Ride-hailing services will be a key target market for the vehicles, he said, declining to give a total dollar figure for this month’s pact.

Manufacturing will be scaled up over the next three to five years, with the goal of eventually producing cars with 65% locally-sourced components for export to the Middle East, Africa, Europe and Latin America, Hamouda said by phone. As much as $20 million needs to be spent on industrial facilities, he added.

The firm’s EV ambitions are just the latest for the North African nation, which is home to some 105 million people but has no more than a few thousand battery-powered cars plying its busy streets. Emerging from a two-year economic crisis and foreign-currency crunch, Egypt is on a push to encourage local industry and the country’s potential as a manufacturing and export hub.

State-owned El Nasr Automotive Manufacturing Co. has for several years been seeking partners for its own EV plans. Meanwhile, Al-Mansour Automotive, which has a longstanding partnership with General Motors Co., has its sights set both on producing EVs in Egypt and importing and marketing Cadillac models.

GV Auto plans to begin by introducing to Egypt the Bestune E05, one of the world’s lowest-priced EVs, which is commonly used for taxi services. Hamouda declined to say how much it would sell for in Egypt. In China, prices start from about $17,500.

“It’s not easy to change the culture” of fossil fuel-powered cars, the chairman said, citing the very few EV charging stations in Egypt.

EVs “will not spread without the government pushing for it” Hamouda said, calling for more state incentives for the sector to encourage would-be buyers.

First Published Date: 27 May 2024, 15:57 PM IST