- Bridging the gap between infrastructure readiness, cost dynamics, and energy transition imperatives is vital for propelling its EV targets and ushering in a greener, more sustainable future.
- Strategic investments, regulatory support, and industry collaboration will be pivotal in navigating the challenges and seizing the opportunities that lie ahead.
The United Arab Emirates stands at the forefront of the global shift towards electric vehicles (EVs), with electric vehicle sales outpacing overall automotive market growth.
The Emirate has strategically identified the electrification of mobility (eMobility) as a priority policy area, embarking on an ambitious plan to decarbonise its infrastructure and energy production.
As the nation marks seven years into this transformative journey, significant milestones have been achieved, signaling a promising future for sustainable transportation in the region.
One of the key indicators of progress is the successful conversion of 20 per cent of federal government agency vehicles to EV powertrains. The initiative demonstrates the UAE’s commitment to leading by example and sets the stage for broader adoption across the public sector.
With a rapidly growing number of EVs on its roads, Dubai has witnessed a remarkable surge in electric vehicle adoption.
A promising future
As reported by the Dubai Water and Electricity Authority (DEWA), the city saw a significant increase in the number of electric vehicles, reaching 25,929 by the end of 2023, underscoring a substantial shift towards sustainability in urban transportation.
Similarly, Abu Dhabi has made notable strides in embracing electric vehicles, with a growing fleet that includes 2,441 EVs, 4,138 hybrid vehicles, and 9,412 natural gas vehicles as of late 2023.
While EVs currently represent less than 1.3 per cent of the total vehicles in the region, the trajectory suggests a promising future for electric mobility in the Emirate.
Projections by PwC estimate a significant rise in EV market share across the UAE.
According to eMobility Outlook 2024 (UAE Edition), EVs are expected to hold a market share of over 15 per cent by 2030, translating to approximately 58,000 vehicles in new passenger car and light commercial vehicle sales. The figure is poised to increase to 25 per cent by 2035, reflecting a growing preference for sustainable transportation options among consumers.
However, this shift necessitates a significant overhaul in the emobility sector.
Collaboration is key
EVs present a sustainable solution due to their zero-emission nature, yet challenges like limited model availability hinder widespread adoption. Policymakers face the task of incentivising reputable manufacturers to introduce more EV models, addressing cost barriers and alleviating ‘range anxiety’ among consumers.
Collaboration among industry stakeholders is key to attracting Original Equipment Manufacturers (OEMs) to the UAE market.
“For EVs to effectively contribute to decarbonisation, they must be accessible, supported by adequate charging infrastructure, competitively priced in terms of ownership costs, and powered by a low emission energy mix,” PwC report said.
Achieving these conditions poses a policy challenge for governments worldwide.
Critical success factors for boosting EV sales and meeting targets include increasing model availability, ensuring optimal operating temperatures for EV efficiency, and enhancing public charging infrastructure.
With a vast majority of available vehicle models in the UAE being ICE cars, accelerating the transition to EVs is imperative. Temperature fluctuations can impact EV performance, with high temperatures reducing range due to increased cooling demands.
Charging infrastructure lags behind
Only a small minority of the vehicle models currently offered by dealers in the UAE are EVs. More than 90 per cent of all available models are ICE vehicles (including hybrids).
By contrast in Europe, while ICE models still outnumber EVs, more than a quarter of all vehicles available are EVs and by 2030 it is forecast that more EVs than ICE vehicles will be available in the market.
In the UAE, 731 ICE models (incl. Hybrid) will be available in 2024 while BEV will have only 56 models.
Compared to Europe, there will be 690 models (incl. Hybrid) will be available in 2024 while 264 EV models will be available.
“Public charging infrastructure remains a significant bottleneck for rapid EV adoption in the UAE, lagging behind increasing demand. Despite substantial investments in renewable energy projects, the number of public charge points is limited, with a majority being slow chargers. Additional efforts are needed to bridge this infrastructure gap and promote widespread EV adoption in the UAE,” report said.
The disparity between the pace of public charging infrastructure deployment and the burgeoning demand for EVs is poised to widen, posing a significant challenge to meeting the ambitious targets outlined in the National Electric Vehicles Policy.
UAE’s energy mix
Projections indicate a need for 45,000 charging points by 2035 to accommodate the anticipated surge in EVs, contrasting starkly with the meager estimate of 10,000 charge points at the current rollout rate.
Cost considerations loom large in the EV landscape of the UAE. While the total cost of ownership for private EVs edges slightly higher than that of traditional internal combustion engine (ICE) vehicles, primarily due to elevated upfront and insurance expenses, commercial buyers now enjoy a cost advantage in adopting EVs.
The increasingly competitive market, bolstered by new entrants vying for a slice of the commercial EV segment, has fueled price wars and escalated discount offerings, especially catering to fleet clients who wield substantial purchasing power.
Regarding energy dynamics, the UAE appears well-equipped in terms of electrical generation capacity to accommodate a surge in EV numbers. Projections by PwC Middle East suggest that even with over 600,000EVs on UAE roads by 2035, the spike in electricity demand would register a mere 1.6 percent increase.
However, challenges persist in the energy transition realm, with the nation’s energy mix heavily reliant on fossil fuels. To achieve meaningful reductions in carbon emissions, a concerted shift towards green energy sources such as renewables and nuclear power is imperative.
While the introduction of EVs promises a notable 11 percent reduction in emissions compared to an all-ICE vehicle fleet scenario by 2035, substantial strides are needed to bring the country’s overall emissions levels down.
A more substantial adoption of EVs, coupled with a determined push towards cleaner energy sources, holds the key to realising significant emissions cuts and fostering a sustainable transport ecosystem in the UAE.