Ineos and Porsche diverge on Middle East’s EV potential

Porsche

• EVs grow in popularity in Gulf
• Ineos looking to region for launch
• Porsche concerned about charging

Ineos Automotive, the UK carmaker backed by billionaire Sir Jim Ratcliffe, is considering launching its Fusilier electric vehicle in the Middle East after encountering difficulties with governments across Europe.

However other industry players such as Porsche remain cautious about the rollout of EVs in the region, with infrastructure remaining a central problem.

London-based Ineos spent more than two-and-a-half years developing the Fusilier, which was launched in February this year and billed as the most robust off-road-capable EV on the market.

The vehicle was to hit roads in 2027 with two powertrains: an all-electric set-up and a hybrid version using a petrol-powered engine to help power the battery.

But the project was parked in July with the company blaming “weak demand” and “uncertainty around tariffs” for the delay. 

European markets, in particular, are struggling with production costs, varying emissions targets and increased competition.

“I’m not wedded to being in Europe. If they don’t want cars, we won’t give them cars. That’s fine,” said Ineos Automotive CEO Lynn Calder at a media event.

“It seems sometimes that they don’t want cars or manufacturing or jobs. And I’m quite happy to say that on the record. This is a continent right now that doesn’t seem to want to be competitive,” said Calder.

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The UK will ban the sale of petrol and diesel vehicles from 2030, while in Europe the ban will be introduced in 2035.

However, Germany ended all EV subsidies at the end of 2023 and France reduced the number of eligible models based on new carbon footprint figures. Norway has closed its VAT exemption for EVs.

Quentin Willson, a campaigner for low emission and electric cars, working with
the UK government’s Office of Low Emission Vehicles, and former presenter of motoring show Top Gear, tells AGBI that the UK will “lose our dominance in the automotive industry” if the country does not get behind EV adoption.

In 2023, the UAE sold nearly 35,000 EVs, while about 1,500 were sold in Saudi Arabia, according to EV consultants Rho Motion.

Meanwhile sales database EV Volumes forecasts that European EV sales will fall 2.5 percent in 2024.

Calder says that, in order to launch, Ineos would need a consumer base of around 40,000.

“I think we could justify it on the back of a US and Middle Eastern and maybe Chinese market,” she said.

The UAE, in particular, has launched several programmes to support EV adoption in recent years, including the Dubai government’s Green Charger initiative that provides public charging points. 

By the end of 2022 there were 620 charging points across Dubai, but concerns remain over costs and infrastructure.

Porsche CEO Oliver Blume says the potential for EVs remains “huge” – its models include the hybrid Cayenne and the fully electric Macan and Taycan – but concedes that infrastructure is an issue.

“Customers who have the opportunity to have their own charging infrastructure, they go to electro-mobility,” he says. “When you want to attract customers who don’t have the opportunity for their own charging, it’s much harder.”

While much of the world is struggling with the transition to EVs, Blume expects adoption in China to reach 70 percent by the end of the decade – 1.3 million EVs were sold in the country in November alone.

Chinese brands are dominating the global market, accounting for two-thirds of global EV sales in the first 11 months of 2024, a year-on-year increase of 40 percent, compared to global growth of 25 percent.

Shanghai-based Nio has become the latest to set up shop in the UAE, opening its first showroom in Mena at The Galleria Al Maryah Island in Abu Dhabi.

Nio develops and operates battery-swapping stations for its vehicles, as an alternative to conventional charging stations. In China, it operates more than 1,300 battery swap stations.

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“As a technology, I think they’ve perfected it,” says Mohammed Maktari, Nio’s Mena CEO. But he cautions that the technology is unlikely to be available globally until 2027.

“It will take us some time here in the Middle East, but if you have a battery-swap station next to your building, you don’t need to have a charger next to your car. It’s not a simple thing and I think it would be a gradual transition,” he says.

Global sales of fully electric and plug-in hybrid vehicles were up for a seventh consecutive month in November, increasing by almost a third year on year, according to research company Rho Motion.

“The infrastructure is a huge problem because many people are sceptical about where and how frequently they can charge and at what cost. Range is still a concern,” says Fabio Hölscher, an analyst at Warburg Research.

“These are all things that will get solved over time. How quickly is the big if, and there are many parties involved in each aspect.”

This article was first published on December 19 2024