A boom in electric vehicles (EVs) is spreading across the globe nowadays. The number of EVs on the world’s roads is increasing rapidly, with China, Europe, and the US at the forefront in terms of the increasing number of policy and business incentives.
China already has 200m electric two-wheelers and 300,000 electric buses on its roads. The Chinese government has projected that, by 2020, there will be 5m EVs in the country. Meanwhile, the total EVs on the road globally are about 2m.
However, EVs still comprise only 1% of auto sales worldwide and are projected to account for just 2.4% of demand in the US, and less than 10% globally by 2025, according to research company LMC Automotive. Yet, no EVs were offered in the Egyptian market until a company named Revolta Egypt announced that it is planning to import EVs and install the required infrastructure in Egypt. To understand the company’s plans in the Egyptian market and the prospect of EVs, DNE sat with Mohamed Badawy, CEO and founder of Revolta Egypt.
Tell us more about Revolta. What motivated you to start the company?
Revolta is originally a Russian company, started in 2012. I was the company’s operations manager in Moscow in 2013, and I fell in love with the idea and concept of electric vehicles (EV) and their infrastructure. So we started studying the possibility of establishing Revolta Egypt at that time, and we planned to launch in late 2015.
But as you know, in 2015 and 2016, Egypt was suffering from foreign currency shortages, and it was hard to know the future of foreign exchange (FX) values and to conduct a valid business model, so we decided to postpone. However, following the economic reform programme adopted by the government and the currency flotation that took place in November 2016, the vision became clear, so we considered 2017 as the first year of operation.
Can you tell us about the company’s investments in infrastructure?
When we decided to start, we were faced with “the chicken or the egg” dilemma—whether we should start by importing EVs first, or should we start by installing EV infrastructure. We decided to take the risk and start by investing in infrastructure, with EGP 100m investments, as it seemed to be the obvious choice that will allow Revolta to market EVs in the Egyptian market.
When will you launch the first phase of charging stations?
Our first phase, which is planned to launch on 11 February, will include around 65 charging points that will cover seven main governorates, including Cairo, Alexandria, and Suez. We will have two types of charging points—first are charging points that will be inside Watania filling stations, and the second are charging points in shopping malls and in many parking lots at clubs, cinemas, universities, etc. Many of these charging points will support fast charging, especially the ones on highways or the Ring Road.
What about government support and incentives; did the government provide any?
We are still negotiating with the government in terms of support and incentives, but I believe that the authorities want to know that we are serious and determined, and to see action on the ground before they provide any serious incentives. In our official launch, we have invited government and official figures, so they can see what we have accomplished.
In terms or customs and tax exemptions, EVs are currently exempted from customs based on a law issued by the Shura Council in 2013, and that is the only legislative mention ever of EVs. We at Revolta had to dig out this law from the archives, and this is what made the idea of importing EVs feasible, because without such exemption, it would be very hard for EVs to exist in the Egyptian market.
How can the government support EVs in Egypt?
That can be done in various ways. First, we hope that the government would allow the imports of used EVs, so that cheaper EVs can be available in the market, within the EGP 200,000 range. This isn’t an odd request; it’s the same way the government allowed the imports of used cars for people with physical disabilities. This is the case in many countries, such as Jordan. That way, EVs would be more affordable, and in this case, Revolta will provide five-year warranties for such cars.
Second is including EVs in the new traffic law, as they aren’t mentioned yet. In terms of licensing EVs, currently the general directorate of traffic has found a workaround, which is calculating a motor equivalent of petrol engines. However, this isn’t the best way going forward.
What are the possible benefits of EVs for the Egyptian economy?
We have been trying to convince the authorities of the economic benefits of EVs. Take a look at the amount of foreign currency currently being wasted on importing spare parts regularly, such as fuel filters, brake lining, and camshafts, which register at about $1bn annually, not to mention fuel imports.
Moreover, there are other indirect benefits, which is the savings that everyone who would use EVs will make. Let’s say if a regular vehicle owner spends about EGP 1,500 monthly on gasoline, by switching to EVs he will save up to EGP 1,200 on a monthly basis.
Egypt has more than 6m individual cars, which would be equivalent to billions of savings that would be spent on something different and boost the economy.
Is it wise to start with EVs without first going through a transition period of hybrid vehicles?
Well, hybrid cars might seem like the reasonable thing to do at first, but in practice, the time has moved past hybrids already. That was good five years ago, but currently EVs are the future. Five years ago, EV technology and infrastructure was still primitive, but this is not the case any more. Hybrid car sales in Europe are dramatically falling, and now many countries are targeting only EVs. Even here in the region, Jordan, for example, lifted the customs exemption for hybrid cars that they had implemented earlier, and now they only exempt EVs.
How does the company plan to market EVs, given their higher initial cost compared to regular vehicles?
Although EVs have higher initial costs, they prove to be less costly in the long term, as they require lower maintenance, and they are, of course, more economical in terms of their running cost (energy consumption).
Consequently, we aim to first target corporations, which have large fleets. As you know, corporations wouldn’t only care about the initial cost, but they will consider the overall equation, especially as such fleets usually cover large distances on a daily basis; thus converting to EVs would cut their costs by a huge amount, not to mention their maintenance costs. That’s why many of the first vehicles that we will offer will be minivans.
On the other hand, with regards to individual vehicles, there are different strong points in favour of EVs. First is their hassle-free operation; second is the environment, as they have a very low carbon footprint; and more importantly, the EV uniqueness. As a company, we want EV buyers to know and feel that they own something different and special, and that is very important to many prospective buyers, and we hope that media as well can play a large role in explaining the benefits of EVs.
What about the charging costs?
We will provide 100 hours of free charges for everyone who will purchase a car through Revolta, which would be the equivalent of around 40,000-50,000 kilometres.
After that, a full charge, which is equivalent to about 250 kilometres, will cost around EGP 50 only, which is way cheaper than gasoline or diesel.
Will all your charging stations offer fast charging?
We will have fast charging stations on the highways and the Ring Road, which takes less than one hour for a full charge, but in malls and parking lots, we will install the normal charging stations that take from three to four hours for a full charge.
Can you tell us about the auto dealers and manufacturers that you have already negotiated with?
Most of the auto dealers in Egypt view EVs with doubt, and they want to wait to see if they will be successful before they commit.
However, Nissan Egypt and Hyundai are very supportive of the idea, and they are the only two brands that we will offer, besides Tesla, which will be the luxurious line of our company. However, we will not be a Tesla dealer; as you know, they don’t have any official dealers in any country, yet we will provide all the aftersales services needed (spare parts, maintenance, etc.).
What about importing Chinese cars, especially with the EV strategy currently adopted by the Chinese government?
Chinese cars are either low-quality cheap cars, which would give EVs a very bad reputation in the Egyptian market, or high-quality cars which cost almost the same as any other EV such as the Nissan Leaf, which is more preferable for Egyptian consumers.
Are EVs already available for purchase at Revolta, and what is your sales target?
Currently, EVs are available for pre-orders, where you can order any of the cars offered and will receive them within a three- to four-month period, as we currently only import by order.
We plan to have 10,000 cars on the Egyptian streets by 2020, and hopefully even more.