Egypt's New Scrappage Initiative: Electric and Hybrid Take the Lead

Government sources have revealed preliminary details of the new old-car replacement initiative announced by Minister of Industry Khaled Hachem, with work underway to finalize implementation mechanisms and secure the incentives needed to attract citizens and companies. The program is taking shape.

The initial framework focuses on supporting the transition to clean energy. Both the Ministry of Industry and the Ministry of Finance are preparing a comprehensive program that includes a set of incentives and facilitations to encourage citizens to replace their aging vehicles with newer, more efficient models that produce lower emissions. This approach aims to boost demand for locally manufactured cars while also supplying scrap materials to feed the national industry.

Eligibility and Support Framework

Only fully electric and various hybrid models will be included in the initiative. Sources confirmed that these vehicle categories are the sole focus of the new program, representing a clear shift toward sustainable mobility. Participation will be limited to models currently assembled in Egypt, with imported vehicles excluded from the scheme entirely. This decision directly supports local manufacturing efforts.

The projected financial support will surpass previous government offerings. Officials estimate the incentive values will be significantly higher than those provided under the old replacement program. That ceased operations several years ago, to keep pace with the price increases witnessed across the automotive market. The package aims to make the transition more accessible to a wider segment of car owners.

A Precedent That Fell Short

In 2021, the Egyptian government launched the first phase of a similar initiative targeting vehicles over 20 years old, aiming for 70,000 cars across 7 governorates, but the program stalled and eventually halted without achieving its goal. The earlier version offered a green incentive of 10% of the new car's value, capped at EGP 22,000 for private vehicles. 20% capped at EGP 45,000 for taxi vehicles, fully funded by the Ministry of Finance. The lessons from that experience are now driving the new approach.

Questions remain about execution timelines and exact subsidy amounts. Whether the new initiative can overcome the obstacles that hindered its predecessor will depend on transparency and efficient rollout. All eyes are on the official announcement to reveal the complete set of terms and conditions.