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Electric car sales on the charge due to UAE policy

Dubai EV charger Wam
Dubai is targeting 1,000 EV charging stations in the emirate by 2025
  • 22,000 EV sales predicted by end of year
  • Plans to add to 500 charging points
  • Abu Dhabi signs agreements with Audi, BMW and Porsche

The UAE is forecast to encounter a 32 percent increase in sales of passenger electric vehicles this year as the government launches a national policy to support the sector’s growth.

Sales are expected to reach almost 22,000, up from an estimated 16,442 in 2022.

Longer-term calculations suggest the total number of EVs will exceed 370,000 by 2032, representing 11 percent of the UAE’s passenger vehicles.

While the ratio of EVs to charging points is expected to worsen in the short term, analysts at BMI expect strong growth to alleviate the longer-term risk of EV uptake slowing drastically due to “high range anxiety”.

In June, the Ministry of Industry and Advanced Technology signed a letter of intent with Shahin, a new company being set up in Abu Dhabi by NEV Enterprise, to develop the first charging station factory in the UAE.

Under the deal the ministry will support the company in securing offtakes for locally manufactured EV charging stations.

BMI estimates that the UAE’s EV charging network reached around 500 points in 2022 but plans have been announced to boost that number significantly.

Charging expansion

Adnoc Distribution has agreed to establish a joint venture, E2GO, with Abu Dhabi National Energy Company to build and operate a network in Abu Dhabi and the wider UAE.

Dubai Electricity and Water Authority has also stated that it is aiming for 1,000 charging stations in Dubai alone by 2025.

“As the number of electric vehicles on the road increases, so does the need for reliable and convenient EV charging infrastructure, presenting a great opportunity for businesses,” Rami Abu Hayah, CEO of Abu Dhabi-based CATEC Mobility, said.

The Ministry of Energy and Infrastructure has also signed cooperation agreements with manufacturers and investors including Audi, Siemens, BMW, Jaguar Land Rover, Mercedes-Benz, General Motors and Porsche.

Redseer Strategy Consultants said in a new research note that the region is on the cusp of a “significant transformation” in its automotive landscape.

“With the right policy and infrastructural support, the market is projected to grow its EV penetration five-fold by 2027,” its analysts said, adding that the percentage of EVs could rise from 2 percent in 2022 to 12 percent in just five years.

Redseer said car buyers in the UAE tend to own multiple vehicles, with EVs as their secondary cars.

The market has experienced a bigger rise in the adoption of high-end EVs compared with Saudi Arabia and Turkey, where affordability is more of a factor.

A growing market

According to the organiser of the Electric Vehicle Innovation Summit (Evis), which was held in Abu Dhabi in May, progress in the market in the Middle East has been slow but is starting to pick up.

“The number of EV charging stations is increasing, and several companies are investing in EV production and research and development,” Evis director Naser Al Bahri said.

BMI analysts added that sales will continue to strengthen in the UAE as the economies in the wider GCC region diversify to include EV and hydrogen fuel cell manufacturing.

In 2022, M Glory Group laid the foundation stone for its $400 million EV manufacturing plant in Dubai, which has a targeted capacity of 55,000 units per annum.

Meanwhile Kizad, part of AD Ports Group’s Economic Cities and Free Zones, signed a lease agreement with NWTN to establish an assembly plant in Abu Dhabi.

Dutch start-up Lightyear launched the world’s first long-range solar electric vehicle last year, and has also picked Sharjah for its first overseas expansion.

Passenger EV sales in the UAE are expected to average annual growth of 14 percent to 2032 with a strong upside risk if local EV production develops as planned, added BMI.

Tesla vehicles remain popular in the UAE, along with traditional brands such as BMW, Mercedes, Volvo and Chevrolet.

However, more affordable Chinese EV brands such as BYD, Geely, Hongqi, Nio and Xpeng are also expected to gain market share over the short term.

Electric commercial vehicle sales have so far failed to take off in the UAE.

An estimated 50 units were sold in 2022, largely consisting of vans and buses.

Analysts said there are a number of commercial EV tests taking place in the UAE, including delivery company FedEx.

Admiral Mobility, a Geely EV distributor in the region, also said last year that it plans to unveil fully electric trucks in the UAE and Saudi Arabia in 2023.

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