The Egyptian government is studying imposing an import tariff of about 5% for the first time on fully packaged imported (CBU) pure electric vehicles to adjust the current tax structure where "imported complete vehicles are cheaper than local production"...

According to Egyptian media quoted sources from the Ministry of Finance, the Egyptian government is studying imposing an import tariff of about 5% for the first time on fully packaged imported (CBU) pure electric vehicles to adjust the current tax structure of "imported complete vehicles are cheaper than local production." The relevant plan is still in the research stage, and the Ministry of Finance, the investment department and the industry department are assessing the impact and plan to submit it to the Cabinet for a final decision before the end of 2026.

The background of this policy trend is the sudden acceleration of the Egyptian electric vehicle market. In the first half of 2026, sales of new electric vehicles in Egypt reached approximately 11,600 units, an increase of 190% from 3972 units in the same period last year. Among them, there are about 9800 private passenger cars, accounting for about 85%; after entering the second half of the year, the total number of electric vehicles in Egypt has exceeded 30,000. The rise in traditional fuel prices is considered by the local government to be one of the important factors driving consumers to switch to electric vehicles.

Imported pure tram now has zero tariffs, and Egypt believes that local manufacturing is "at a disadvantage" 

According to the current policy disclosed in the report, pure electric vehicles completely imported by Egypt currently enjoy a 0% import tariff and mainly bear a 14% value-added tax. The problem is that imported parts needed to assemble or produce electric vehicles locally in Egypt are subject to a tariff of about 2% and a 14% value-added tax.

Sources from the Ministry of Finance believe that this creates an obvious cost inversion: an electric vehicle produced overseas can enter Egypt with zero tariffs, and if a company builds a factory in Egypt, it will have to pay taxes on imported production materials. In this case, the financial attraction of directly importing complete vehicles is higher than investing in local assembly and manufacturing.

Therefore, Egypt's consideration of imposing a 5% tariff this time is not simply to "step on the brakes" on electric vehicles. The more important purpose is to rebalance the cost of CBU imports and local manufacturing, so that overseas car companies will be more motivated to put production lines in Egypt.

This is particularly worthy of attention for China auto companies. Egypt is gradually shifting from "welcoming the import of China cars" to "welcoming the production of China cars in Egypt," and policy concerns have changed.

With a six-year growth of 190%, BYD has become a popular brand 

The expansion rate of the pure electric vehicle market in Egypt has accelerated significantly. In the first half of 2025, only about 3972 new electric vehicles entered the market, and by the same period of 2026, it has reached 11,600, which means that the new scale in just one year is nearly three times the original.

In terms of brands, China BYD and Volkswagen have become the leading local brands in electric vehicle registrations. The rapid expansion of China brands is closely related to the rich product selection, competitive pricing and the increased acceptance of new energy vehicles by Egyptian consumers.

However, the faster the market grows, the more willing the Egyptian government will be to promote localization. In recent years, Egypt has always hoped to develop automobile manufacturing into a key industry and reduce import dependence through local assembly, parts manufacturing and vehicle production. If pure electric vehicles continue to maintain rapid growth, they will naturally not remain outside this industrial policy for a long time.

5% has not yet been implemented, but exporting companies already need to re-account

It needs to be noted that the current 5% is still the government's "tax rate under study" and is not a new tariff that has already been implemented. Whether to ultimately adopt this tax rate, when it will take effect, and whether to set differences in model or origin still need to wait for the formal decision of the Egyptian cabinet.

If it is finally implemented, the impact on terminal car prices cannot be simply understood as a "direct increase of 5%", because it must also be judged based on vehicle customs valuation, value-added tax calculation method, importer profits and market competition.

For China's used car export practitioners, special attention should be paid to the actual coverage of the policy. The core of the report's discussion is the complete import of pure electric vehicles, which cannot be directly equivalent to Egypt relaxing or tightening the import of ordinary used cars. However, it will affect the overall price system of new energy vehicles in Egypt and will further encourage China companies to consider CKD/SKD and local manufacturing models.

written in the end 

Egypt is no longer satisfied with "importing China's electric vehicles," but hopes to leave assembly, manufacturing and investment together. For China's second-hand car exporters, in the short term, we should pay attention to whether the new tax rate will eventually be implemented and its transmission to the terminal price of new energy vehicles; in the medium and long term, we should see that after the number of pure trams in Egypt quickly exceeds 30,000, battery testing, second-hand residual value, parts and maintenance businesses will gradually form a market. In the future, when doing new energy business in Egypt, the space for simply competing on the price of a whole vehicle may become smaller, and local channels and after-sales capabilities will become more and more valuable.

Source: Guangdong Good Car

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