Egypt to expand local EV making deal with Volvo

From the newsletter

Egypt is planning to expand the scope of its cooperation with Swedish car maker Volvo for local manufacture of EVs. Volvo in 2023 signed an agreement with Egyptian bus maker MCV to produce electric buses in Egypt for export to Europe. About 50% of each bus's components are manufactured locally as part of the deal. 

• Egypt had laid the ground for years to attract EV manufacturers before its Volvo deal. The country launched an incentives program in 2022 to encourage the localization of EV manufacturing for both local and international automakers.

• The Egyptian government has not revealed the nature of the expansion of its deal with Volvo. But it will likely see more components for the EVs made locally.

More details

• MCV and the Egyptian Ministry of State for Military Production produced the first locally-made e-bus in 2021. The design, exterior, and interior skeleton and 60% of the components were manufactured in Egypt.

• Such collaborations between private and State-owned or affiliated entities have become pivotal in Africa’s e-mobility shift. In Kenya for instance, e-bus startup BasiGo has partnered with Kenya Vehicle Manufacturers in which the government has a 35% stake to make 1,000 e-buses. In South Africa, State-owned BAIC also makes EVs.

• Besides Egypt, Volvo also manufactures EVs in South Africa. Volvo has cemented itself as a leader in South Africa’s EV segment, where it sold 467 units between January and September 2024. For context, 10,948 hybrid and electric vehicles were sold in the country during the period.

• But the Swedish automaker also sells EVs in other African countries where it does not manufacture. It delivered its first heavy electric truck to Morocco in 2023. It was the first heavy battery-electric truck from a global manufacturer to be in commercial operation in Africa.

• Volvo’s EX30 was the fastest-selling EV in South Africa in 2024. The EX30 is one of three models the company sells in the country. Its lineup also includes the XC40 Recharge and the C40 Recharge. In Egypt, its lineup of fully electric cars includes the EX30, C40, and XC40.  

• Africa, with its rapidly growing population, has become attractive to global EV makers in recent years. However, foreign firms are mainly focused on a select few markets such as Morocco, South Africa, Egypt, Nigeria, and Kenya which have more advanced EV markets. 

Our take

• Egypt is betting big on its abundant renewable energy capacity to power its industrialization. This is ideal for electric mobility. Such cooperation with leading EV manufacturers such as Volvo will fast-track its plan to increase the usage of EVs in the country. With its population of more than 112 million, Egypt is ripe for the e-mobility transition.

• The country’s government offers incentives to encourage the purchase and manufacturing of EVs. These incentives include tax reductions, customs duty exemptions, and a cash subsidy of up to $2,500 for the purchase of locally-made EVs. Such incentives will help African countries to hasten their adoption of clean mobility.

• Africa should sustain its momentum in the race towards e-mobility. While the continent has made significant steps towards making EVs more attractive to buyers, a lot needs to be done. African countries should make it easier for investors to put capital into EVs.