Raya Auto to build $50m EV plant in 2026

From the newsletter

Egyptian EV company Raya Auto has announced plans to set up a $50 million assembly plant in the country in 2026. Half of the project cost is self-financed and the rest secured through bank loans. The automaker also plans to invest $25 million to build 30 fast-charging stations in Egypt over the next 3 years. 

• The Giza-based company, which was established with an initial investment of $8.3 million, makes electric golf carts, scooters and motorcycles. It currently runs a 10,000 square-metre assembly plant where it makes EVs.

• Raya Auto has also been partnering with global automakers to introduce their brands in Egypt. In June 2024, the company partnered with Chinese carmaker XPENG to introduce its XPENG P7 sedan and XPENG G9 SUV to the Egyptian market.

• Our take: Egypt has a fast-growing EV assembly industry, attracting significant capital from both local and foreign investors. Raya’s new plant, once completed, will increase Egypt’s EV production capacity… Read more (2 min)

More details

• Raya Auto is the Egyptian market leader in the light e-mobility segment, with thousands of units delivered each year from its local production facilities. The company, which has more than 200 employees, also has a nation-wide distribution network, and offers after-sales facilities.

• Besides Raya Auto, a number of Egyptian EV startups are also building assembly plants in the North African country. In October 2024, Chinese automaker BAIC Company and Alkan Auto Company, which is owned by Egyptian International Automotive Group, signed a deal to set up an EV manufacturing plant in Egypt. The 120,000 square-metre plant, which will begin production in late 2025, will initially produce 20,000 cars in the first year, increasing to 50,000 by the fifth year.

• GV Auto, a subsidiary of Egypt-based GV Investment Group, will also start EV assembly in the country in 2025 with an initial investment of $59.6 million. The company has partnered with Chinese automobile manufacturer FAW Group. GV Auto targets rolling out no less than 3,000 EVs annually.

• Soaring car prices and a weakening purchasing power is ravaging the Egyptian automotive sector, which is grappling with reduced sales. The sale of fuel-powered cars dropped by 70% in the country between 2021 and 2024. Like ICE vehicles, sales of EVs are also struggling.

• EV sales currently make up just 0.1% of automobile sales in Egypt. There are an estimated 9,000 EVs in the country of more than 112 million people. This has also affected investment in charging infrastructure. Already, several companies investing in Egypt’s EV charging stations have halted further investments due to low returns.

• Egypt's EV market was valued at $10.22 Billion in 2024 and is expected to reach $20.08 Billion by 2030 with a CAGR of 12.03% during the forecast period. The Egyptian government has introduced several policies to promote the adoption of electric vehicles, such as offering tax exemptions and subsidies for EV buyers.

• Despite this challenging backdrop, more than a dozen EV firms have invested in Egypt, where demand for EVs is projected to grow. There are 16 EV startups in Egypt, which include Rabbit, Shift EV, Seavo, Electrified, and Vesstoss. 

Our take

• Partnerships will be key to navigate Egypt’s challenging EV market. In July 2024 for instance, Raya Auto announced a strategic battery supply partnership with Shift EV, an Egyptian e-mobility startup specializing in battery manufacturing and fleet electrification. Such partnerships create symbiotic relationships that enable each firm to thrive in their niches.

• Incentives hold the key for Egypt’s e-mobility drive. Egypt already offers incentives to encourage the purchase and manufacturing of EVs. Egypt already offers incentives such as tax reductions, customs duty exemptions, and a cash subsidy of up to $2,500 for the purchase of locally-made EVs. Proper application of these incentives will help the country’s e-mobility sector to accelerate its growth.

• Access to cheap and reliable electricity will play a pivotal role in Egypt’s e-mobility journey. The country is currently developing the $1.1 billion Suez Wind Project. The wind farm, which will be Africa’s largest, will have an installed capacity of 1.1 GW. The project, in addition to others that are in the pipeline, will help increase electricity access in the country.