Electric Vehicles Are Reshaping Industrial Investment in Egypt — Samer Choucair Identifies the Winners and Losers
Investment leader Samer Choucair said the Egyptian government’s consideration of a 5% customs duty on fully imported electric vehicles, for the first time, represents a shift in the country’s policy toward clean vehicles.
He explained that moving from a complete customs exemption of 0% to a limited 5% duty, while maintaining the 14% value-added tax, could redirect part of the capital flowing into the sector toward domestic manufacturing.
Choucair said the proposed measure aims to address a competitive imbalance between imported vehicles and those manufactured locally, as domestic factories incur duties on production components while fully built vehicles enter the country without customs duties.
He added that the potential decision presents institutional investors with a new equation combining protection for an emerging industry with the risk of a temporary impact on demand, describing the policy as a shift from unrestricted imports toward more selective industrial localization.
Rapid Growth in a Market Still in Its Early Stages
Samer Choucair noted that the number of electric vehicles in Egypt increased by approximately 190% during the first half of 2026, reaching 11,600 units compared with around 4,000 during the same period a year earlier.
He said the total fleet exceeded 20,000 vehicles by the end of 2025, with expectations that it could reach approximately 30,000 by the end of 2026.
Electric vehicles, however, remain at an early stage of market penetration, accounting for around 3% of passenger cars in some months.
Choucair explained that the current market has relied heavily on Chinese brands, while actual domestic production has yet to begin at scale. This makes any change in customs duties directly relevant to the competitive equation between importers and local manufacturers.
Customs Duties as a Signal to Industrial Capital
Samer Choucair said Egypt had relied for years on a complete customs exemption for imported electric vehicles to accelerate the transition toward clean energy and expand consumer choice.
However, he noted that the system created a gap between imported vehicles and domestic manufacturing.
According to Choucair, the government’s study aims to encourage investors to establish assembly or manufacturing lines before the end of 2026, coinciding with the expected launch of Egypt’s first locally manufactured electric vehicle from the Nasr “Dongfeng” plant.
He added that three companies have also submitted requests to amend the duty structure in ways that would support domestic production projects.
Choucair said the transition from a complete exemption to a 5% duty sends investors a signal that Egypt no longer intends to be merely a consumer market for imported vehicles, but instead seeks to build a manufacturing base capable of exporting to African and Middle Eastern markets.
Institutional investors, he said, will closely monitor how the duty aligns with other incentives, particularly reductions in tariffs on production inputs, because the balance between protecting finished products and supporting domestic supply chains will determine the sustainability of foreign direct investment flows.
Opportunities in Batteries, Components and Infrastructure
Choucair explained that the new duty could put pressure on importers’ margins, particularly Chinese brands that have dominated supply because of their competitive pricing.
At the same time, however, it could provide local manufacturers and assemblers with greater room to compete.
This could open the door to investments in batteries, electronic components, assembly lines, and charging infrastructure.
Choucair noted that groups such as Mansour Group have announced plans for manufacturing facilities that include electric models, while Egypt is simultaneously seeking additional Chinese investment in clean vehicles and batteries as part of a broader advanced-manufacturing strategy.
He said the policy could lead capital markets to reprice shares or assets linked to local assembly compared with pure importers, while its short-term impact on debt markets is likely to remain limited.
Accelerating capital expenditure on manufacturing facilities could also increase demand for bank financing and joint ventures, while private equity and venture capital funds could find opportunities across supply chains and charging-station infrastructure.
A Test of Egypt’s Ability to Attract Higher Value-Added Manufacturing
Samer Choucair said a 5% duty would not be high enough to destroy demand, but could be sufficient to alter the cost equation in favor of companies investing inside Egypt.
The key question for investors, he argued, is whether Egypt can attract high-value-added manufacturing rather than simply basic assembly operations.
Choucair noted that emerging-market policies in 2026 increasingly favor approaches that link import access with domestic production.
He added that exchange-rate stability and the availability of foreign currency will remain critical factors in attracting investment into the sector, alongside clarity and consistency in customs and industrial policies.
Egypt as a Regional Production Hub
Choucair said the biggest opportunity lies in Egypt’s potential to become a regional production hub for electric vehicles, benefiting from its geographic location, trade agreements, and large consumer market.
The success of this transformation, he explained, will depend on the speed of launching domestic production, the development of a nationwide charging network, and the stability of industrial policy.
He cautioned that prices for some imported models could temporarily rise and sales growth could slow if domestic production does not become available quickly enough.
The measure could also generate reactions from certain trading partners if it is perceived as discriminatory, while Egypt’s industrial transition overlaps with efforts by Gulf countries to build local value chains in the electric-vehicle sector as part of broader economic-diversification strategies.
Capital Moves Toward Productive Assets
Samer Choucair concluded that a final decision on the proposed duty could be issued in the coming months if the current studies continue on their present course.
He said its implementation would form part of a broader framework aimed at gradually increasing local content.
Long-term investors, Choucair argued, will increasingly favor companies capable of building genuine manufacturing capabilities rather than simply importing vehicles.
As a result, capital allocation could shift more heavily toward productive assets and supporting infrastructure, provided that industrial policies remain consistent and transparent.
Choucair emphasized that the transformation is not simply about a 5% customs duty.
Rather, it represents a test of Egypt’s ability to move from rapidly consuming imported technologies toward building an industry capable of competing regionally.
Investors who recognize these signals early, he concluded, will be better positioned to direct capital toward sectors benefiting from the rebalancing between imports and domestic production.