{"id":118707,"date":"2024-11-06T08:39:30","date_gmt":"2024-11-06T08:39:30","guid":{"rendered":"https:\/\/alj.com\/?post_type=perspective&p=118707"},"modified":"2025-04-03T06:27:24","modified_gmt":"2025-04-03T06:27:24","slug":"are-evs-winning-the-race-in-the-middle-east","status":"publish","type":"perspective","link":"https:\/\/alj.com\/en\/perspective\/are-evs-winning-the-race-in-the-middle-east\/","title":{"rendered":"Are EVs winning the race in the Middle East?"},"content":{"rendered":"
This Perspectives article is reproduced from a Jameel Motors<\/a> Insights article, which can be read in its original location here<\/a>.<\/h5>\n

As the world accelerates its efforts to \u2018go green\u2019 and combat the climate crisis of global warming, sales of electric vehicles (EVs) are surging. \u00a0Globally, battery-powered vehicles accounted for around 20% of new car sales in 2023, a tenfold increase in market share compared to just five years ago.[1]<\/a> \u00a0Moreover, the electric takeover is gaining speed. \u00a0In 2023, EVs enjoyed a 35% year-on-year increase from 2022. \u00a0More, new EVs were registered each<\/em> week<\/u><\/em> in 2023, than during an entire year a decade earlier. \u00a0Wherever one looks, friends and neighbors appear to be purchasing green vehicles at an electrifying pace.<\/p>\n

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However, there is one caveat: \u00a0This perception depends overwhelmingly on where one calls home. \u00a0The 14 million new EVs registered in 2023, may have lifted the global stock to just over 40 million vehicles, but more than 90% of these sales were based in the mature mobility markets of Europe, China and the United States.<\/p>\n

In emerging markets around the Middle East, Eurasia and Africa, EV adoption has remained comparatively sluggish. \u00a0Across the Middle East as a whole, green vehicle registrations comprise less than 1% of total car sales \u2013 a statistical outlier given the global swing behind eco-friendly transport.[2]<\/a><\/p>\n

The standard reason for the Middle East\u2019s slower uptake of EVs tends to focus on the region\u2019s long relationship with oil, the natural resource which has made many countries in the region wealthy on the back of global fossil-fuel dependency. \u00a0Oil generates more than a trillion dollars of revenue each year in the region and is tipped to continue growing by almost 4% annually between now and the end of the decade.[3]<\/a><\/p>\n

There are signs that the lack of appetite for EVs in the Middle East is changing, however, spearheaded by the economic success story of the United Arab Emirates. \u00a0In 2023, the UAE registered around 35,000 new EVs,[4]<\/a> raising the UAE\u2019s EV sales penetration rate to 3% \u2013 still considerably lower than the global average, but significantly higher than fellow Gulf states like Qatar (0.6%) and Saudi Arabia (0.1%).[5]<\/a><\/p>\n

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Encouraged by this, the UAE is hoping half of all vehicles on its roads will be electric by mid-century. \u00a0That enthusiasm could be contagious. \u00a0Industry watchers expect this buoyancy to rapidly spill over into other Middle Eastern markets. \u00a0Global business advisory Deloitte foresees the Middle East EV market undergoing dramatic growth in the coming years, potentially reaching US$ 7.65 billion by 2028, almost three times its US$ 2.7 billion value in 2023.[6]<\/a><\/p>\n

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So, what is prompting this belated yet welcome change in fortunes for the EV market in the Middle East, and what roadblocks remain in the way of an expected green transition?<\/p>\n

Legislation encourages public-private push for EVs<\/h2>\n

The anticipated boom in EV sales within Middle Eastern markets can be attributed to several factors: \u00a0The introduction of pro-EV legislation by governments; competition between high-profile manufacturers seeking a foothold in the region; the signing of joint ventures to share risk and maximize reward; and ambitious investments to bankroll the expansion of battery storage solutions.<\/p>\n

Few industries can achieve the lofty trajectories anticipated for EVs without state-level support. \u00a0Across the Middle East, we are seeing initiatives launched to hasten their journey into the mainstream.<\/p>\n

The Saudi Arabian Standards Organization (SASO<\/a>), for instance, is currently fine-tuning regulations for the use of EVs on public roads, opening the door for wider adoption. \u00a0Concurrently, the Saudi Public Investment Fund (PIF) is recognizing that the future is electric by backing companies such as Japanese auto giant Hyundai, and US sustainable mobility pioneer Lucid Motors, with billions of dollars to start manufacturing EVs in the coiuntry. \u00a0Lucid\u2019s first factory opened in Jeddah in September 2023, with a commitment by the Saudi government to purchase up to 100,000 Lucid EVs over the next decade.<\/p>\n

Saudi Arabia is further seizing the initiative by funding its own state-sponsored green vehicle. \u00a0Foxconn\u2019s<\/a> (Hon Hai Technology Group) Ceer<\/a>, based in the King Abdullah Economic City (KAEC) on the Red Sea coast, hopes its first fleet of electric sedans and SUVs will roll off production lines by 2025. \u00a0The project is drawing on the sovereign wealth kitty to co-fund a US$ 9 billion facility manufacturing microchips, EV components and related electronics. \u00a0Such a bold strategy should pay dividends, with Ceer expected to attract US$ 150 million of foreign investment, create some 30,000 jobs, and contribute around US$ 8 billion to the country\u2019s GDP by 2034.[7]<\/a><\/p>\n

In the UAE, meanwhile, the Road Transport Authority (RTA) is laying the legislative groundwork for a more comprehensive network of charging stations around the country. \u00a0New regulations in Abu Dhabi specify for the first time rules regarding the ownership and management of EV supply equipment.<\/p>\n

These new laws, together with recent EV-friendly pricing mechanisms for customers, are bringing clarity to the industry and helping make private investment a more attractive proposition.<\/p>\n

Dubai has its own 2030 Green Transport Strategy, establishing a target of more than 40,000 EVs on the roads by the end of the decade. \u00a0Leading by example, the government intends to ensure that 30% of its own vehicle fleet is electric or hybrid by 2030. \u00a0Part of its strategy involves making EV ownership more convenient and practical, hence its declaration that at least 5% of all parking spaces must from now on be designated exclusively for low-emission vehicles.<\/p>\n

The UAE\u2019s active promotion of green transport has been pivotal to creating a fertile environment for EVs, the country ranking seventh in 2023\u2019s Global Electric Mobility Readiness Index.[8]<\/a><\/p>\n

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Jordan provides ample evidence of the transformative power of legislation. \u00a0In 2020, Jordan cut import duties on EVs from 25% to 10%, considerably lower than taxes imposed on hybrid (55%) and petrol (86%) cars. \u00a0The result? \u00a0Passenger EV sales grew almost 46% in 2023, reaching 23,400 units.[9]<\/a> \u00a0The move will bring ongoing benefits, potentially lifting EV sales to 40,000+ annually by 2032.[10]<\/a><\/p>\n

Joint investments are likewise proving a smart method of splitting the risk and achieving economies of scale, particularly for market newcomers.<\/p>\n

Abu Dhabi investment firm CYVN Holdings<\/a>, for instance, has invested US$ 1.1 billion in Chinese EV maker NIO <\/a>to stimulate business growth. \u00a0Nationally, the UAE Ministry of Energy and Infrastructure has partnered with Swedish electric trucking company Einride <\/a>to encourage sustainable freight throughout the region, with a deal to supply 2,000 electric trucks and a further 200 autonomous trucks.<\/p>\n

Across the border in Saudi Arabia, the Ministry of Investment has signed a US$ 5.6 billion deal with Chinese startup Human Horizons<\/a> to build and sell electric vehicles in its territory.<\/p>\n

In a further example of cross-fertilization of talent and capital, US manufacturer Gauss Auto last year joined with Bahrain\u2019s Marson Group to open Bahrain\u2019s first EV factory<\/a>. \u00a0The factory, situated in the Salman Industrial City in the American Trade Zone, will make a range of vehicles including two-wheelers, tricycles and passenger cars.<\/p>\n

In such an energized environment it is perhaps little wonder that major international manufacturers of EVs are beginning to explore the Middle East auto market.<\/p>\n

China charges ahead in Middle East EV markets<\/h2>\n

US auto giant Ford is planning to launch its own range of EVs across the Gulf region no later than 2025. \u00a0In so doing, Ford is following the lead set by fellow American OEM General Motors, which introduced the Cadillac Lyriq, GMC Hummer EV and Chevrolet Bolt EUV to the Middle East in 2023. \u00a0America is far from alone in seeing the potential for an EV surge in the Middle East. \u00a0China \u2013 the dominant force in EVs globally with 60% of worldwide sales \u2013 is, unsurprisingly, leading the Middle Eastern charge.<\/p>\n

The UAE has proven particularly receptive to EVs from China, a cooperation doubtless eased by the UAE\u2019s recent admittance into the BRICS political and trading organization, of which China was a founding member. \u00a0The number of Chinese manufacturers launching EVs in the UAE reached double figures in 2023, with the UAE ranking ninth among China’s top 10 vehicle export markets, shipping some 159,000 units.[11]<\/a><\/p>\n

Already in 2024 Dongfeng Motors<\/a>\u2019 subsidiary Venucia <\/a>has scored a series of strategic pacts with a range of regional partners, while Arcfox and Skyworth Auto have also sealed vehicle import deals worth billions of dollars.<\/p>\n

BYD Auto<\/a>, based in Shenzhen, is another Chinese EV producer growing its Middle Eastern presence. \u00a0It reports surging interest within Jordan, where rival EVs such as Tesla and Volkswagen\u2019s ID.4 have already established an appetite for green mobility. \u00a0In Egypt, BYD\u2019s plug-in hybrids and EVs are managing to compete effectively with more established marques, partly by focusing on the taxi market.<\/p>\n

With positive momentum behind the transition to EVs in the Middle East, eyes pivot to the future. \u00a0What hazards remain in the road for manufacturers of green vehicles, and what steps could be taken to consolidate such an encouraging trajectory?<\/p>\n

Innovation proves EV hurdles are not insurmountable<\/h2>\n

Positive publicity and healthy sales are steps in the right direction, but without a robust support infrastructure the EV revolution in the Middle East could fail to fulfil its early promise.<\/p>\n

If local manufacturers cannot source batteries to power their cars, or if buyers are confronted by inadequate charging options, they will vote with their wallets and revert to fossil fuel alternatives.<\/p>\n

Fortunately, several countries are moving quickly to lay the groundwork for sustainable motoring.<\/p>\n

The UAE this year unveiled plans to construct a 40 GWh gigafactory in the Ras Al Khaimah Economic Zone to produce semiconductor battery cells.[12]<\/a> \u00a0The plant will be part-funded with US$ 3.2 billion investment from US-based battery maker Statevolt. \u00a0It comes hot on the heels of plans for the first battery recycling facility in the region. \u00a0The plant, a partnership between the UAE\u2019s Ministry of Energy & Infrastructure, Lohum and BEEAH Group, will process up to 3,000 tons of li-ion batteries annually, while also reconditioning 15 MWh of batteries suitable for energy storage systems.[13]<\/a><\/p>\n

Saudi Arabia, in turn, has been funneling billions of dollars from the Ministry of Industry and Mineral Resources into a new EV battery metals plant and steel production facility. \u00a0The project, part of a broader scheme to attract US$ 32 billion investment into the minerals sector, is seen as integral to Saudi Arabia\u2019s dream of becoming MENA\u2019s mining and logistics hub.[14]<\/a> \u00a0Following the investment, the ministry received more than a hundred exploration license applications from foreign companies.<\/p>\n

Charging stations are continuing to proliferate, too. \u00a0Given the comparatively low number of EVs in the region overall, the Middle East already has an impressive vehicle-to-point ratio of 6.5 \u2013 well ahead of the global average of 15.9. \u00a0However, within this figure lies significant disparity between different countries, from a 1.8 ratio in Qatar, to 7.1 in the UAE, to 10.4 in Saudi Arabia \u2013 and the expansive landscapes of these areas makes generous charger supply a necessity rather than a luxury.<\/p>\n

The push for a comprehensive charging network is ongoing. \u00a0In the UAE, for instance, the number of charge stations has now expanded to 350, with the Dubai Electricity and Water Authority (DEWA) planning to install more than 1,000 extra plug-in points by the end of 2025. \u00a0Etihad Water & Electricity is embarking on an EV charger spree, fitting an array of AC and DC chargers across the north of the country. \u00a0The power of partnerships is proving its potency too, with TAQA <\/a>and ADNOC <\/a>Distribution joining forces to build and run its own chain of EV charging stations.<\/p>\n

In Saudi Arabia, legislators know that most EVs are charged overnight at home. \u00a0The Saudi Electric Vehicle Charging Infrastructure Development Initiative is targeting more than 50,000 domestic charging stations by the end of 2025[15]<\/a>. \u00a0Simultaneously, the Saudi Electric Company has a deal in place with Nissan Motors, Takaoka Tokyo and the Tokyo Electric Power Company to develop a network of fast-charger EV stations across the country[16]<\/a> \u2013 vital if widespread adoption is to be achieved.<\/p>\n

Saudi Arabia is also keen to demonstrate how technology can transform EV charging. \u00a0Auto service provider Petromin has founded a subsidiary known as Electromin, tasked not only with launching 100 EV charging points across the country, but also an accompanying mobile app to help people plan their charging patterns.<\/p>\n

The Jordanian government, eager to demonstrate the efficiency and legitimacy of EVs, has invested in more than 10,000 public charge points, as well as purchasing hundreds of Teslas as government vehicles.<\/p>\n

Climate concerns<\/h2>\n

Despite these advances, more work lies ahead in allaying general misgivings about the suitability of EVs for the unique Middle East environment.<\/p>\n

Electric vehicles have generally been developed in cooler, damper climates than those offered by the Middle East, where hot, dry days are the norm. \u00a0Such conditions have been shown to impact battery performance, with one study suggesting temperatures above 35\u00baC can reduce potential driving distances by up to 17%.[17]<\/a><\/p>\n

Manufacturers are aware of the issue, however, and are working hard to tailor solutions. \u00a0Specialized EV components are being designed to withstand extreme temperatures, and cooling systems are being hurriedly enhanced to preserve battery lifespan and harmonize performance levels.<\/p>\n

Doubts also remain over so-called \u2018range anxiety\u2019 \u2013 the concern that EVs can only travel a limited distance on a single charge. \u00a0This perception is particularly harmful in the Middle East, given the region\u2019s vast and unforgiving desertscapes. \u00a0However, the latest generation of EVs are starting to change the conversation. \u00a0In tests, a number of EVs now boast driving ranges exceeding 500 or even 600 miles per charge, including models from Tesla, NIO and Lucid, all of whom have a presence in the Middle East.[18]<\/a> \u00a0Several dozen other EVs have crossed the 400 mile threshold, showing that such impressive milestones are becoming the rule rather than the exception.<\/p>\n

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One of these is the R1T, manufactured by California-based Rivian<\/a>, a tech startup in which Abdul Latif Jameel<\/a> was an early investor<\/a>.\u00a0 The Jameel family\u2019s ambitious support for Rivian is just one of the ways in which Abdul Latif Jameel is contributing to the move towards more sustainable mobility solutions in markets across the globe.<\/p>\n

Steering the Middle East towards an EV future<\/h2>\n

People deserve a future mobility scenario that is cleaner, faster and smarter \u2013 a future in which sustainability becomes a genuine option for everyone.<\/p>\n

In early 2023, Jameel Motors<\/a> accelerated its quest to electrify the mobility sector by becoming the official national distributor for MG Motor<\/a> in Morocco <\/a>, GAC Motor<\/a> in Egypt<\/a>, and BYD<\/a> in T\u00fcrkiye<\/a>.<\/p>\n