Two Chinese electric cars have hit the Egyptian market in line with the government’s sustainability push but some say the expensive price tags are out of touch with the country's current economic crisis.
Dongfeng’s E70 500 Pro is now being sold by exclusive distributor Misr Helwan Automotive for 897,000 Egyptian pounds ($29,300).
Meanwhile, Abou Ghaly Motors has introduced Geely’s Geometry C, with the 400km charge model going for $36,900 and the 550km model for $39,900, with both offered only in US dollars as Egypt suffers from a foreign currency crunch.
“The price is very high and when people compare the prices with prices abroad, they find that the difference is huge,” Ayman Mohamed, founder of the Electrified consumer platform, tells The National.
The E70 500 Pro costs about $24,000 in the US, while the Geometry C is $32,550, according to comparison website motowheeler.com. The prices in China are even cheaper.
In general, cars have long been sold at a premium in Egypt but a combination of factors has made them unaffordable for many.
The Russia-Ukraine war has left Egypt with a higher import bill, supply chain disruption and an acute foreign exchange shortage. The central bank has devalued the country’s currency three times in the past year, with the pound now at 30 to the dollar.
Prices have doubled as a result: in 2021, a 2020 Tesla Model 3 sold for 925,000 pounds and now the 2022 version sells for 2.2 million pounds.
Slow EV adoption
Egypt, which hosted the Cop27 UN climate change conference in November, has said clean transport and renewable energy are important ways to accelerate the country’s green transition and achieve its 2030 Agenda for Sustainable Development.
But the country has not signed on to the Zero Emission Vehicles Declaration agreed to at Cop26, which is working towards all sales of new cars and vans being zero emission no later than 2035 in leading markets and 2040 globally.
Signatories include 29 governments, such as the UK, Canada and France, and 14 car manufacturers, such as Ford, General Motors and Volvo.
About a dozen governments in emerging markets committed to a less specific goal of “working intensely towards accelerated proliferation and adoption of zero-emission vehicles”.
Nearly 10 per cent of global car sales were electric in 2021, four times the market share in 2019, according to the International Energy Agency. This brought the total number of electric cars on the world’s roads to about 16.5 million.
Electric vehicles will make up about half of the new car sales worldwide by 2035 as the push for net-zero carbon emissions accelerates, according to Goldman Sachs Research.
Egypt has a long way to go towards EV adoption. Industry professionals estimate there are 3,500 to 4,000 electric cars on the road — up from about 1,000 to 1,800 in 2021 — in a country with a population of 104 million.
The Egyptian government had plans to manufacture the E70 cars through a deal signed in January 2021 between the state-owned El Nasr Automotive Manufacturing Company and Dongfeng, with the support of the Ministry of Public Enterprise.
However, the plans fell through a few months later due to an import-pricing dispute with the automaker, according to a statement from the ministry.
“The intention is there to locally manufacture … but when will it happen? That’s the question,” Shams Abdel Ghaffar, managing director of Infinity EV, tells The National.
Infinity EV has so far built a network of 135 charging stations, with more than 500 charging points. The number of users on its application has doubled from 2,000 to 4,000 in less than two years.
At the same time, global and local economic circumstances have delayed the price parity between internal combustion engine cars and electric cars.
“It was supposed to reach parity by 2025. Now we’re looking at another two to three years before it reaches parity,” Mr Abdel Ghaffar says.
Original equipment manufacturers selling EVs in the Egyptian market, such as BMW, Hyundai and Porsche, have been bringing in limited supply to assess demand.
“They’re playing it very safe. They bring 10 to 20 cars and they test the market and see if there’s appetite,” Mr Abdel Ghaffar says.
Barriers for the electric switch
A lack of consumer finance options and government incentives to switch to electric are additional barriers, says Mr Mohamed of Electrified, a one-stop platform for electric mobility connecting users and services.
The government’s Automotive Industry Development Programme has been in the works since 2016, but has gone through several delays and revisions.
The strategy will introduce a tariff system to facilitate procedures for custom releases and support local assembly. It will also provide cash incentives for buyers of locally-assembled electric cars.
In the meantime, the electric cars that are brought into the Egyptian market should be tailored to the population’s needs given the economic crisis, Mr Mohamed says.
“We can’t bring in cars that cost more than 1 million pounds and a user has half a million pounds. And it doesn’t make sense at the same time to bring in a car that costs 300,000 pounds because the user has 500,000 pounds, but the specs are not suitable to the needs of the market."
Dongfeng’s E70 500 Pro covers up to 420km on a full charge with 160 horsepower. It saves owners 200,000 to 250,000 pounds per 100km on lower fuel and maintenance costs, according to the car maker.
Geely’s Geometry C covers up to 550km with 201 horsepower. The car saves motorists about 80 per cent in fuel and running costs compared to traditional vehicles, Abou Ghaly says.
Mr Mohamed recommends the government imports or manufactures electric cars that have a low range and low battery, sufficient for daily commuting.
“If you need a glass of milk, you don’t buy a cow,” he says.
“If I’m driving 100km per day, why do I need to get a very expensive car that goes 500km per charge?”
The used EV market is weak, because owners do not want to let go of their cars and have to purchase another one, Mr Mohamed says.
Despite the challenges, he thinks it is still important to push for the EV transition in Egypt.
“It’s the right time, but it’s about selecting the right product that the market really needs," he says.
Source: The National
