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With fuel prices rocketing and cars getting more expensive, many UAE residents are turning to EVs as an alternate green choice

By Muhammad Ali Bandial

Published: Fri 29 Jul 2022, 9:00 AM

If you are like me, then you must have recently started driving with one eye on the road and the other on the fuel gauge, constantly weighing the pros and financial implifications of driving that extra mile. With the rising fuel costs, no on can deny the need for a cheaper mode of transport.

Added to that is the effect of gasoline driven cars to the environment.According to studies conducted by the US Environmental Protection Agency (EPA), a typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year. Furthermore, every gallon of gasoline burned adds some 8,887 grams of carbon dioxide to the atmosphere.

There have been substitutes but they have been slow in gathering momentum. Although electric vehicles (EV) have steadily provided users with a chance to switch to a more environmentally friendly lifestyle, there had not been any takers. Until only a few years ago, there were only one million EVs on the road globally. Today, that number has mushroomed to more than 20 million, with 500,000 new cars sold every month, according to 2022 figures. Infact, it is estimated by the International Energy Agency (IEA) that in 2021, out of all car sales, 8.6 per cent were EVs. Most experts put the rising costs of fuel to be the leading reason for this drastic change in consumer preferences.

As the cost of petrol in the Emirates increased by 12 per cent in July, standing at more than Dh4.50 a litre, growing number of UAE motorists are switching to hybrid and electric cars to cut costs amid rising petrol prices.

This was corroborated by BloombergNEF’s seventh annual Electric Vehicle Outlook, which made longer-term predictions about the future of EVs in the next few years. While the industry for EV — assessed to be worth roughly $105 billion in 2021 — analysts at Vantage Market Research predict it to continue to soar and is expected to reach $354.80 billion by 2028. Globally, according to the EY Mobility Consumer Index (MCI), the number of consumers looking to buy EV’s has reached 52 per cent, representing an increase of 22 per cent in just two years.

According to the findings of the recent edition of the Global Electric Vehicle Outlook, sales of electric cars (including fully electric and plug-in hybrids) doubled in 2021 to a new record of 6.6 million, with more now sold each week than in the whole of 2012. Infact, the report says that despite roadblocks and obstacles, the popularity of EVs among consumers shows no signs of slowing with two million electric cars sold worldwide in the first quarter, up by three-quarters from the same period a year earlier. The number of electric cars on the world’s roads by the end of 2021 was about 16.5 million, triple the amount in 2018.

BMW has also joined the EV bandwagon with the first series-produced vehicles of the new BMW 7 Series rolling off the production lines of BMW Group Plant Dingolfing. In a double debut, the new top-of-the-range BMW has been manufactured not only with highly efficient combustion engines but also as the fully electric BMW i7. Milan Nedeljković, BMW AG Board Member for Production, said: “Our new BMW 7 Series is the first luxury sedan in the world to offer customers a choice between three types of drive. Whether fully electric, combustion-powered or, soon, plug-in hybrid, we have the flexible production structures and outstanding integration skills we need to manufacture such a diverse range of drives efficiently.”

The point was emphasised by Fatih Birol, Executive Director at IEA, when he said: “Few areas of the new global energy economy are as dynamic as electric vehicles. The success of the sector in setting new sales records is extremely encouraging, but there is no room for complacency.”

In the Middle East, there has been growing interest in eco-friendly alternatives to the internal combustion engine vehicle as the UAE is pushing for 42,000 EVs to be on its streets within the next decade.

Speaking about this, Mohammad Ghazi Al Momani, General Manager at Emirates Motor Company, said: “The boom in EVs in the UAE has been long in the making, and is only likely to grow. We are seeing high demand for EVs, accounting for over 10 per cent of the interest of EQ versus combustion engine cars. This has been reflected in the large numbers of pre-bookings we have received for the Mercedes-Benz EQS, EQE, EQC EQB as well as EQA. At Emirates Motor Company, we recognised early on that many customers are choosing to shift to EVs, either due to the rising fuel costs or to be more sustainable, without compromising on luxury. We have worked closely with Mercedes-Benz to ensure that our customers are provided with a range of options, from the entry-level EQA to the top-of-the-range EQS. These state-of-the-art luxury vehicles are sustainably built and full of cutting-edge technology. We are proud to have successfully delivered the first batch of the EQ models and will soon be delivering more."

As per the findings of the UAE Electric Vehicle Market, the EV market is still in its growing period and in terms of revenue, the market size is expected to grow at a CAGR of 24.2 per cent during the 2022-28 period.

Currently, in the face of increasing fuel costs, residents in the UAE are now planning their car journeys more carefully, with about 25 per cent saying they use public transport a lot more now, while 14 per cent of drivers have purchased an electric scooter or bike to use over short distances, as per the findings of a survey conducted by Audi Abu Dhabi.

This point was also raised by Vincent Wijnen, Senior Managing Director at Al-Futtaim Automotive when he said:" Driven by the UAE’s vision for sustainable development and the UAE National Smart Mobility strategy, Al-Futtaim Automotive will support the UAE vision by introducing new products and services to keep the UAE moving towards building a more sustainable future of mobility."

He said that the UAE strategy brings an opportunity for automotive manufacturers and dealerships to embrace it and be a driver of change to support this vision. "We were one of the pioneers in alternate propulsion in the region when we launched Hybrid Electric Vehicles in the UAE back in 2008 with Al-Futtaim Toyota and we continue to provide several alternative powertrains throughout Al-Futtaim Toyota, Al-Futtaim Lexus, Trading Enterprises Volvo and Polestar," he added.

Wijnen said that according to a recent report made by Rolland Berger, after evaluating 27 focus countries on 28 specific criteria, the UAE is now listed as one of countries where the electrification trend is picking up. This demonstrates that the UAE’s vision, supported by private companies such as Al-Futtaim Automotive, is starting to bear results. China, followed by the US and Germany make up the top three.

"The demand for electric vehicles is stronger than it has ever been. This can be attributed not just to the high fuel prices, which are helping to accelerate the growth, but also due to the growing customer awareness and acceptance of the technology, the environmental advantages, the fun factor of the faster acceleration and lower centre of gravity and the smooth and silent driving characteristics of the electric powertrain. Beyond the vehicles we provide, we also offer alternative ways to drive. In October last year, we announced the launch of our new car subscription service, MOOV By Al-Futtaim, aimed at providing convenient and sustainable mobility for the growing demand from customers across the UAE. By taking a short-term and no-commitment subscription, users can access a wide variety of car models, including options of hybrid vehicles (Toyota CHR, Toyota Corolla Cross and Toyota Camry available now, with Toyota Highlander Hybrid in July), and beginning of Q3, electric vehicles will also be available, making Moov By Al-Futtaim, the first car subscription service, having electric cars in its fleet. All cars are 100-point checked and delivered straight to their door at no extra charge," said Wijnen.

Speaking about this, Jonathan Pollock - Regional Managing Director for Emerging Brands at Al-Futtaim Automotive, said: "Demand for electric vehicles is stronger than ever, due to higher fuel prices, but also growing customer awareness and acceptance of the technology, the environmental advantages, and exhilarating performance of electric powertrains. A recent Digital Life Index report by Publicis Sapient revealed 82 per cent of potential buyers in UAE would consider an EV, rising to 90 per cent for a hybrid, showing there is clear market demand."

He added that Al-Futtaim Automotive was appointed as the official representative of Polestar in the UAE in Q1 2022. "The launch of Polestar aligns with the government’s strategic target of Net Zero emissions by 2050, and we are driven by the UAE’s vision for sustainable development and the UAE National Smart Mobility strategy."

According to survey results, about 52 per cent of UAE residents are considering a switch to hybrid or EVs in the face of increasing in fuel prices, forcing consumers to reconsider their transportation needs and preferences. The survey also notes that out of the 1,000 people polled, twenty-five per cent are waiting for more EV options to be launched before taking the plunge.

Speaking about the growing interest, Mark Austin, General Manager at Audi Abu Dhabi, said: “Interest in EVs has continued to grow organically over time. However, increasing petrol prices have certainly accelerated the shift in consumers’ attitude towards EV adoption.”

“When considering energy efficiency across the full life cycle of producing, transporting and using fuel — typically referred to as ‘well to wheel’ — electric vehicles offer high efficiency and the lowest carbon emissions per mile,” he added.

The UAE has taken a number of bold decisions to accelerate the pace of the transition towards EVs as more than 20 per cent of the fleet of cars belonging to government agencies are now EVs. As transportation is one of the main sources of greenhouse gas emissions (GHGs) globally — as per data accumulated by Statista, the road transport emissions in the UAE amounted to 40.7 million tons of carbon dioxide — various initiatives and programmes across the country have been rolled out to encourage the shift towards green mobility. In Dubai alone, the number of registered green vehicles has grown to 8,489 in 2021. There were 2,473 EVs in the city until the first quarter of 2021, while the remaining 6,016 were hybrid vehicles. Furthermore, the city plans to make public transport emission-free by 2050, making Dubai the first city in the MENA region to map out a comprehensive emission-free plan for public transport and related infrastructure. Currently, there are more 240 charging stations for EVs in the UAE, with Dubai holding the distinction of being the leading city in the world in terms of the number of charging stations available.

MG Motor has confirmed it has been conducting hot weather testing of its all-electric and exciting Marvel R model in the Middle East. This marks a crucial phase for the MG brand as it looks to pave the way for future all-electric car launches in this region. The car has been pushed to the limits as part of a range of different evaluations in various hot weather situations and conditions, to ensure it lives up to the high standards delivered by the rest of MG product lineup. Tom Lee, Managing Director of MG, said: “When we relaunched the MG brand in the Middle East, we committed ourselves to working incessantly with our team in HQ to ensure our products are continuously enhanced and optimally equipped for each individual market’s environmental conditions. This ensures our vehicles, especially our fully electric Marvel R, are among the most capable vehicles in all our markets. With these assessments, we are getting closer to introducing an exciting range of electric models to our customers in the Middle East who are ready to embrace an all-electric lifestyle.”

Saeed Mohammed Al Tayer, Managing Director and CEO of Dubai Electricity and Water Authority (DEWA) said that the organisation has provided over 8,800 megawatt-hours of power to electric vehicles in Dubai since 2015, as a part of its EV Green Charger initiative. In other words, this amount of electricity has enabled EV users to travel approximately 58 million kilometers in eco-friendly vehicles and experience a 73 percent reduction in refueling costs. The Green Charger network initiative by DEWA has already expanded to over 325 charging stations across Dubai, equivalent to over 560 charge points. With the rising demand, major players are vying to make their presence felt in the market, with brands such as Tesla leading the charge and others including BMW, Audi and Mercedes-Benz in close pursuit. In order to cater to this rising demand for ‘green mobility’, the UAE recently opened its first electric vehicle manufacturing facility in Dubai Industrial City, which built at a total cost of $408 million. The facility is expected to produce 55,000 cars per year.

There are a little less than 20 million passenger EVs on the road, which includes plug-in hybrids as well. While this number is large, it represents 1.5 per cent of the total number of cars. The good news is that the popularity of EVs is on the rise and analysts have predicted that the figure will double again by the end of next year.

While the EV market in the country is still in its infancy, there have been policies put in place over the years that have made it easier to use electric vehicles, including increasing the number of charging stations, and free Salik and reserved parking in Dubai. The city also signed a deal for 200 Tesla vehicles to be added to the Dubai Taxi Corporation fleet to promote the emirate’s plans of green mobility solutions and as part of its plan to have 25 per cent of the city’s trips converted into driverless journeys by 2030. However, that is not to contend that it will be smooth sailing as issues still remain. The EV industry will have to make greater efforts to diversify battery manufacturing and critical mineral supplies to reduce the risks of bottlenecks and price rises.Oscar Rivoli, Managing Director of Trading Enterprises, said: "The shift to an all-electric future can already be witnessed and is being supported by Volvo worldwide with over 34 per cent of total sales volume in Q1 2022 consisting of electrified 'Recharge' models (The Volvo Recharge range incorporates both Plug-In Hybrid (PHEV) and EV powertrains). Of these, eight per cent were fully electric, a percentage which has doubled over the last two quarters. This growth of fully electric cars sales is expected throughout 2022 and by H2, the annual production capacity for fully electric cars will be expanded to 150,000 to satisfy this increased demand." He added that Trading Enterprises Volvo recently launched the Volvo XC40 Recharge compact SUV and the C40 Recharge compact Crossover in the UAE, both of which feature fully electric powertrains. "While introduced in the last few months, we have been encouraged by the strong demand to date and are seeing sales follow global trends," he added.