Egypt's BME for Battery Manufacturing has signed an agreement with China's Contemporary Amperex Technology (CATL) to establish an electric battery manufacturing plant, with initial investments of more than EGP 2 billion for the project's first phase, the Ministry of Industry announced on Sunday.

 

BME is a newly established joint venture founded by Egyptian private bus and truck maker Manufacturing Commercial Vehicles Company (MCV), Auto D for Industry, Trade and Supplies, a publicly traded company and solutions provider for Egypt’s automotive sector, and CATL.

CATL is a Chinese zero-carbon energy technology company and manufacturer of battery energy storage systems (BESS) for electric vehicles (EVs).

The project will have an initial production capacity of 1 gigawatt-hour (GWh) annually, rising to 5 GWh in the second phase. The second phase will include batteries for passenger vehicles and clean-energy storage batteries for solar and wind power applications, with a targeted local content rate of 40 percent. No timeline or location for the project has been disclosed.

The plant aims to establish a specialized industrial base for battery systems in Egypt, initially focusing on batteries for heavy commercial vehicles, with future expansion into passenger car batteries and energy storage solutions.

It will also expand Egypt's manufacturing and export capabilities in the battery industry, support knowledge transfer, develop a local supply chain, and reduce shipping costs, reflecting the country's ability to “meet global manufacturing standards and produce high-quality, competitive products,” Industry Minister Khaled Hashem said.

The project will also utilize Egypt's location, production capabilities, and engineering expertise, combined with advanced Chinese technology, production equipment, and technical support. This will help meet local and global demand for electric batteries in the transport and energy sectors.

Egypt's exports to China surged by around 200 percent year-on-year to $840.8 million in the first six months of 2026, up from $280.5 million in the same period in 2025. China is one of Egypt's largest trading partners and a major source of FDI across multiple sectors, including construction, textiles, electronics, energy, transport, and manufacturing.

The two countries have been working to expand their economic partnership, with Chinese President recent historic visit to Cairo resulting in the signing of multiple memorandums of understanding on industrial manufacturing, technological, economic, and supply-chain cooperation, as well as the launch of the third phase of the China-Egypt TEDA Suez Economic and Trade Cooperation Zone.

The project comes as Egypt's trade deficit continues to widen, most recently by 58.5 percent year-on-year to $7.5 billion in June 2026, up from $4.7 billion in the same month a year earlier, amid ongoing regional tensions that have caused supply-chain disruptions and a higher import bill.

Furthermore, Egypt has been stepping up efforts to transform its assembly-based automotive industry into an integrated sector by manufacturing complete vehicle bodies domestically, alongside launching a vehicle replacement programme to boost demand for locally made cars and reduce steel imports, as the country's automotive sector was rising steadily at the beginning of this year.

The automotive feeder industries are an important pillar of the National Automotive Industry Development Programme (AIDP) and a key driver of efforts to attract global automakers, Hashem said.

The AIDP was launched in October 2025 to localize vehicle manufacturing, attract international investment, boost exports, and reduce reliance on imported cars and components. It targets raising local value-added content to 60 percent, increasing the share of domestic industrial components to more than 35 percent, and reaching an annual production volume of 100,000 vehicles.

This aligns with the government's strategy to improve industrial development and component usage as part of efforts to expand non-oil manufactured exports, improve the economy's resilience to external shocks, and raise annual exports to $100 billion by 2030.