While the Middle East’s electric vehicle market is still in its infancy the worldwide rollout of new EV models is accelerating its adoption as governments and consumers embrace the transition away from internal combustion engines.
It is predicted that the global market for new cars will be half electric by 2035, according to a new study by Goldman Sachs. Our strategists expect technology innovation to outperform these forces in the coming years, despite some major crosscurrents in the electric vehicle sector. By the end of the year, electric vehicles may become as cheap as vehicles with internal combustion engines as a result of increased competition, government incentives, and falling battery prices.
Aside from Tesla, Elon Musk’s brand leads the Middle East EV market other electric models in the region include the MG ZS EV Renault Zoe E-Tech, Volvo XC40 Recharge Pure Electric, and Polestar the recently launched Swedish brand.
Electric vehicle adoption in the Arab Gulf states is primarily driven by commitments to accelerate the transition from fossil fuels to renewable energy sources by the 2030s.
To give EVs an acceptable range and to encourage consumers to buy electric vehicles the Gulf countries need to increase the number of charging stations.
According to Tom Lee, MD of MG Motor Middle East “in the region electric vehicles are likely to rise substantially as a result of government-led changes notably the construction of infrastructure to allow consumers to travel great distances.”
In 2021, the Middle East and African electric vehicle market was valued at $40.25 million by 2027 it is expected to reach $93.10 million growing at a compound annual rate of more than 15%.
The figures are impressive considering the global EV market suffered a major setback during the COVID-19 pandemic which led to the closure of several factories and the onset of a global semiconductor chip shortage.
Electric Vehicle sales have since rebounded worldwide, doubling in 2021, reaching a new record of just under 7 million cars equivalent to 10 % of car sales worldwide, according to the Electric Vehicles Initiative issued the World EV Outlook.
Global EV sales increased steadily in 2022, with 2 million cars sold just in the first quarter. Market revenues are projected to reach $322.50 million this year.
Consumers (in the region) have grown more educated as a result of the GCC countries’ goals for renewable energy and the decline in the cost of electric vehicles Tom Lee told Storyline World News.
In November the UAE will host the UN Climate Change Conference COP28 coinciding with its ‘Year of Sustainability.’ Lee says the UAE’s manufacturing plans are also attractive to investors.
In the Emirates, about 50% of taxis are eco-friendly or hybrid vehicles. By 2027, the Dubai Roads and Transport Authority (RTA) plans to have only hybrid electric or hydrogen-powered taxis operating.
Since its launch in 2016, Ekar the region’s first mobility company, and the self-drive super app have added ten Teslas to their fleets available in Dubai and Abu Dhabi’s Masdar City.
According to Vilhelm Hedberg co-founder and CEO of Ekar EVs are exceptional cars for car sharing.
An electric vehicle has fewer moving parts than an internal combustion engine car which has a lot more opportunities for failure maintenance, and issues to arise reducing the vehicle’s off-road time significantly.
Hedberg believes that the number of electric vehicles on the road will increase over the next few years, with about 325 charging stations across the UAE catering to less than 1% of all vehicles registered there.
According to a global readiness equation for EVs, the UAE ranks eighth. Norway, China, Germany, Singapore, and the UK take the top five positions for EV market share.
As a result of the UAE’s infrastructure already being laid out, the country is on the right track.
Saudi Arabia is expected to invest $50 billion in electric vehicle production over the next decade, resulting in at least 30% of Riyadh’s vehicles being electric.
A spokesperson for Ceer Saudi Arabia’s first homegrown electric vehicle brand told Storyline World News, that the Saudi public has a strong affinity for classic cars.
The spokesperson noted that Saudis “have a strong affinity for technology” and will adopt new ideas.
Despite many brands not selling BEVs officially in Saudi Arabia today you can find them on the streets of Dammam, Jeddah, and Riyadh, the spokesperson said referring to fully electric cars without a gasoline engine and rechargeable batteries.
A spokesperson for Ceer said its consumer insights revealed a strong interest in the company’s vehicle portfolio “The interest is both due to the vehicle’s iconic design and infotainment features, but also due to a host of other factors, including value for money, total cost of ownership, and increasing awareness of topics related to sustainability.”
Approximately 21 percent of the Kingdom’s total energy was consumed by the transport sector in 2020 according to the Saudi Energy Efficiency Center. That year there were more than 15 million registered vehicles in the Kingdom.
Through its Public Investment Fund (PIF) Saudi Arabia owns 61% of Lucid Group. At Lucid’s first overseas manufacturing facility in King Abdullah Economic City on the Red Sea coast Lucid will initially reassemble Lucid Air vehicle kits produced in Arizona.
With a peak capacity of 150,000 vehicles a year, the plant will eventually build complete vehicles. Crown Prince Mohammed bin Salman launched Saudi Arabia’s first homegrown electric vehicle brand late last year.
With aspirations to sell a variety of vehicles both in Saudi Arabia and across the Middle East and North Africa PIF-backed Ceer will be among the first brands to develop Electric Vehicles in Saudi Arabia.
In 2034 Ceer is expected to contribute $8 billion to Saudi Arabia’s GDP creating up to 30,000 direct and indirect jobs in the region.
As part of King Abdullah Economic City’s giga-projects such as Qiddiya, Roshn and NEOM fleets of electric vehicles will be deployed.
According to Mohamed Shaheen president of Schneider Electric’s KSA and Yemen cluster, a strong energy management infrastructure is necessary to facilitate the switch from conventional gasoline engines to electric mobility.
As he told the EVlink smart charger launched in the region last year is just one of many next-generation products that will contribute to a more sustainable energy matrix.
Shaheen claims, that even though the cost of an eco-friendly vehicle is significantly lower today than it was 20 years ago, simply increasing the number of EVs on the road won’t make a significant impact on emissions.
By providing a fantastic and manageable charging experience that displays makes do and to the extent, feasible leverages EV charging equipment EVs can become even cleaner he continued.
Energy Sage estimates that charging EV costs about 3.5 times less per mile than fueling up a petrol car. Long-term EV charging costs are reasonable Shaheen continued, particularly when efforts are made to create more environmentally friendly production techniques.
The deciding factor ultimately would be consumers’ willingness to swap their petrol engines for electric vehicles despite the growing readiness of the public for Electric Vehicles adoption in the region.
According to Lee of MG Motors, people are looking for “the reliability and comfort they’re used to in traditional engines.”
There has been a fundamental shift in the market due to the declining EV prices and the rise in petrol prices. By 2026, he said almost 45,000 EVs are expected to be sold in the region due to fluctuations in fuel prices over 2022.
EVs have a strong resale value which is why they are becoming more popular as investments according to Ekar’s Hedberg.
A survey commissioned by Audi Abu Dhabi found that 52% of UAE residents are considering buying an electric vehicle. According to studies, every shared car removes 17 private vehicles from the road. People who want to lead a more sustainable lifestyle have taken to car-sharing in recent years resonating with the trend in European cities.
However, the consensus view of automotive executives is that EVs and new energy vehicles are the way forward for the Middle East region.