UAE and Qatar at the forefront of electric mobility in GCC

• Green growth opportunities for utility companies as GCC have made important first steps along the journey to e-mobility.
• From infrastructure to consumer behaviour there are significant challenges ahead, but where there is investment and political will, there is a way.
• GCC relies heavily on road transportation, and while consumer awareness of sustainability is rising, the preference for SUVs powered by petrol and diesel endures.

Countries across the Gulf Cooperation Council (GCC) countries have invested heavily in their public transport systems in recent years but for as long as people rely on private vehicles, the answer to sustainable travel lies under the hood.

However, the technologies and political will behind e-mobility are firmly in place in the region.

Yet the region faces a hurdle; nations across the Gulf rely heavily on road transportation, and while consumer awareness of sustainability is rising, the preference for SUVs powered by petrol and diesel endures.

The electrification of transportation offers a promising solution to climate change — but only if combined with a transition to electric energy generation from renewable resources.

According to Arthur D. Little’s Global Electric Mobility Readiness Index (GEMRIX) 2023, the UAE is ranked seventh globally, followed by Qatar at ninth, Kuwait at 14th, Bahrain at 18th, Oman at 19h and Saudi Arabia at 23rd, out of 35 markets across continents.

Norway is ranked first, followed by China, Germany, Singapore and the UK.

Dubai Green Mobility Strategy 2030

Furthermore, the UAE has experienced an increase in EV charging infrastructure owing to government-led initiatives, a significant catalyst behind the increasing number of consumers willing to buy an EV as their next vehicle.

“In the UAE, the Dubai Green Mobility Strategy 2030 aims to introduce approximately 42,000 electric cars onto the emirate’s roads within the next six years and the country at large has developed its charging infrastructure, with around 700 charging stations currently operational. For its part, Qatar has already achieved its target of electrifying 25 per cent of its public transit bus fleet and the adoption of EVs is being encouraged through green financing options,” Carlo Stella, Partner at Arthur D. Little Middle East, and Global Sustainability Lead, said.

However, he said that Saudi Arabia’s Public Investment Fund (PIF) has launched Tasaru Mobility Investments, designed to accelerate the development of Saudi Arabia’s electric vehicle and autonomous mobility ecosystem.

Saudi Arabia has also launched its first national electric vehicle brand, Ceer, in partnership with Foxconn, and has entered the world of electric motorsports.

Infrastructure hurdles

Philipp Seidel, Principal at Arthur D. Little, Germany, said that the GCC has made important first steps along the journey to e-mobility.

However, he said that widespread uptake among local populations’ hinges on the region’s ability to overcome significant infrastructure hurdles.

“Prime among the challenges is charging network density, both in alternating current (AC) power and the faster direct current (DC) power.  Air-conditioned vehicles with high energy consumption require dense infrastructure, and while homes and workplaces are often well-served with AC charging points, there is a need for high-speed public DC charging points to be installed across the region.”

On the demand side, he said that vehicle electrification will substantially increase electricity requirements. However, with EVs expected to account for less than 10 per cent of total electricity demand by 2030, the challenge relates mainly to the local impact of charging, with the potential for network overloading risks if large numbers of EV owners charge their cars in the same place, at the same time – a challenge that is particularly acute in residential blocks.

“To mitigate this risk, utilities must invest in re-enforcing the grid while at the same time taking active demand side management measures to limit the concurrent peak demand.”

EV infrastructure investments

Despite the challenges, Seidel said that business cases are emerging that drive home the potential profitability of EV infrastructure investments, with opportunities for a range of stakeholders such as vehicle manufacturers, utility companies, private equity firms, and infrastructure funds.

Historically, there have been three roles in the public EV value chain: charge point operators (CPOs), mobility service providers (MSPs), and e-roaming platforms. Today, it is in the interplay between CPOs and MSPs where the most value lies.

In addition to the growth potential for CPOs and MSPs, Stella said that two business models for new services are emerging – V2G and V2H.  In a vehicle-to-grid (V2G) service, an EV battery is used to provide flexibility to the electricity grid and the vehicle owner is compensated accordingly. Meanwhile, behind the metre, vehicle-to-home (V2H) service involves the use of an EV battery as an energy supplier in instances of network overload, for peak shaving, or as an energy management system that reduces costs.

As countries across the GCC continue to develop their e-mobility ecosystems, decision makers may wish to consider the following steps:

1. Integrate mobility and renewable energy strategies and respective stakeholder ecosystems.
2. Conduct simulations of EV charging demand based on EV market models and traffic simulations.
3. Stress-test energy grids, based on EV charging simulations.
4. Investigate energy storage solutions for technical and economic feasibility.

“The road to electrification will not be smooth, but under the weight of a global climate crisis and net zero pledges, opting out of the race is off the table. With transport counting among the world’s biggest greenhouse gas emitters, building sustainability across the sector is vital and e-mobility will be a key driver of change,” Stella said,

In the GCC, he said that the journey has begun; sustainability, decarbonisation, and ‘green thinking’ permeate national visions at almost every level, and EV innovations are being tried and tested region wide.

“From infrastructure to consumer behaviour there are significant challenges ahead, but where there is investment and political will, there is a way,” he said.