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Global EV manufacturers rev up for Gulf race

There is a way to go before electric vehicles overtake fossil fuel cars

electric vehicles gulf Dubai Media Office
Dubai Electricity and Water Authority (Dewa) is rolling out EV chargers

Most experts agree that electric vehicles (EV) are the future, but there is not widespread consensus on when, or even if, they will supplant the traditional internal combustion engine market in the Gulf and other parts of the world.

The environmentalist website 8billiontrees estimated earlier this year that EVs comprised a mere 2.2 percent of the global car market, implying roughly one in 250 vehicles was electric.

So a long way to go before EVs overtake old fashioned gas-guzzlers.

On the other hand, according to the International Energy Agency (IEA), growth in electric car sales is “exponential”. Some 14 percent of all new car sales in 2022 were EV, from less than 5 percent in 2020.

More than half of those sales were in China, which has already surpassed its 2025 target for EV sales. In Europe, around 20 percent of new car sales are EV, while in the USA around 8 percent were EV – a big jump of 55 percent over 2021.

The US number is an overall total and conceals pockets of significantly higher EV penetration.

In California, where I was last week, it seemed as though roughly one in four cars was a Tesla on the freeways of Los Angeles, and there were lots of EV models from the traditional manufacturers in evidence too – Audis, Fords, BMWs and Mercedes.

Parts of Asia have so far been more reluctant to go EV. The IEA estimates only around 1.5 percent of new sales are EV in India and Indonesia, the two biggest markets outside China, with Thailand around 3 percent of new car sales.

Earlier this year, UAE energy minister Suhail Al Mazrouei estimated that just 1 percent of cars on the country’s roads were EV, but forecast this would rise at an annual rate of 30 percent until 2028.

Saudi Arabia has been more ready to jump on the EV bandwagon.

Around 5 percent of cars in the kingdom are EV, according to IEA estimates, up from less than 1 percent in 2016.

Saudi Arabia has invested big in its own EV brand, Ceer, which will be manufactured near Jeddah. The kingdom’s Public Investment Fund is also the majority owner of Lucid Air, an upmarket Californian rival to Tesla.

Projects such as these are important elements in the Saudi transformation plan Vision 2030, to build up non-oil manufacturing capability and provide hi-tech jobs.

Electric vehicles gulfReuters/Nick Carey
Chinese EV maker BYD outsells Tesla worldwide, and is entering the UAE market via a dealership with Al Futtaim

How will the oil-rich Arabian Gulf go in this global battle?

Sitting on vast reservoirs of oil, and passionately in love with motor vehicles as opposed to public transport, you might think the odds are stacked against EV in the region.

But for EV to reach critical scale in the big economies of the region it will probably come down to a straightforward race between Tesla and one of the big Chinese EV manufacturers.

BYD (“Build Your Dream”) Auto, the Shenzhen manufacturer which already outsells Tesla worldwide, has made an aggressive push into the UAE market via a dealership with Al Futtaim, and their vehicles are an increasingly common sight on UAE roads.

The top of the range Atto3 model offers an impressive 420km before a recharge, all the hi-tech gadgets you could want, and is priced below the important buyer threshold of AED150,000.

Whether these features will be sufficient to lure away the petrolheads from their fossil fuel racers, or even provide stiff competition to the “cool” brand owned by Elon Musk, remains to be seen.

A lot will depend on how fast the UAE and Saudi Arabia can roll out a nationwide charging network and improve battery size and capacity – the perennial challenges of the EV business.

BYD founder and chairman Wang Chuanfu recently threw down the gauntlet to both Tesla and the traditional industry with a call to “demolish the old legends” of the global motor market and make Chinese brands the global benchmark in EV.

I have a feeling that the “legends” will not allow China to have it all its own way.

The Gulf, increasingly seeing itself as the pivot between east and west, could well be the track on which this particular race is run.

Frank Kane is Editor-at-Large at AGBI

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