Egypt Studies 5% Customs Duty on Imported Electric Vehicles for the First Time

Egypt is studying the imposition of a 5% customs duty on fully imported electric vehicles for the first time. Six sources, including four government officials, confirmed the plan is under review. The goal is straightforward: protect local industry and attract new investments in clean vehicle manufacturing.

The current rate is zero. Fully imported EVs enjoy a complete customs exemption, paying only the 14% value-added tax. That situation has created a major market gap — local factories pay 2% customs duties on imported production components, plus the same VAT burden.

Why the Government Is Moving Now

The tariff gap made importing far more attractive than building local assembly or manufacturing lines. Local plants pay more, their finished products cost more, and investors find imports easier and cheaper. The result? A sharp decline in the economic viability of local assembly or manufacturing.

The study aims to fix this imbalance. Imposing duties on finished vehicles will make imports relatively less attractive, keeping local production competitive. But the key question remains: is there even local production yet? Egypt still lacks any actual manufacturing or assembly of electric vehicles.

Market Impact and What Comes Next

One official added that the gap has reduced the market's ability to attract new EV investments. Companies prefer relying on imports rather than absorbing the cost of local manufacturing, prompting the government to study new duties to improve local competitiveness.

Electric cars are gaining increasing attention in Egypt amid rising fuel costs. Yet the biggest challenge remains: can the government balance protecting local industry with attracting investment? And will this decision become reality?

The move raises questions about the future of electric vehicle pricing in the Egyptian market. For now, waiting is the operative word in this complex file.