By Manara Global
If someone told you that you could power your car for an entire week for the cost of a McDonald’s cheeseburger, would you believe them?
This is the price of fully charging an average electric SUV in the UAE. For less than USD 3, you can drive more than 300 km, making your daily commute a bargain and of course, better for the environment.
The UAE is the 4th cheapest country in the world for electric vehicle (EV) charging. Overall, a UAE driver could save 88% of their fuel bill by switching to electric, beating the world’s leading EV markets such as the US, UK, and Korea.
The low price of EV charging is one of the many subsidies that the UAE government offers to incentivize EV adoption in the country. In July, His Excellency Suhail Al Mazrouei, the UAE’s Energy Minister, unveiled the National Electric Vehicle Strategy, which aims to increase the share of EVs on the roads to 50% of total vehicles by 2050.
Saudi Arabia has also adopted similar policies to accelerate the green mobility transition. The Kingdom expects to invest USD 50 billion in EV production over the next ten years, aiming for 30% of new vehicles to be electric by 2030. Arthur D. Little, an international management consultancy, ranks the Saudi EV market as more dynamic than advanced OECD countries like Australia and Singapore.
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UAE's Electric Ascent: A Market Poised for Growth
The EV market in the UAE is in its early stages, yet it's expanding quickly. This rapid growth, mirrored in the development of the charging infrastructure, has propelled the UAE to 7th place in the global Electric Mobility Readiness Index. According to Naser Al Bahri, Director of the Electric Vehicle Innovation Summit, the UAE’s EV market is poised to grow by 27% per year from 2023 to 2027.
The demand for electric and hybrid vehicles, referred to as green vehicles, has surged in recent years. Our analysis reveals that the UAE has witnessed a two-fold increase in green vehicle sales since 2020. This spike is most pronounced in Dubai, where EV ownership surpasses the national average by 16%, and with Dubai setting its sights on having approximately 42,000 electric cars on its roads by 2030 as part of the Dubai Green Mobility Strategy 2030, we will see a lot more vehicles on the road.
What is significant is that the younger generation is driving this change. In Dubai, for instance, the proportion of green vehicle owners in the 16-34 age bracket is 30% higher than the national average.
But what motivates these buyers? Our findings indicate a distinct trend: EV owners have a keen eye for the latest technological advancements. They're twice as inclined as the typical auto buyer to describe themselves as early adopters of new technology, and 35% more interested in keeping up with the latest tech developments. Therefore, while EVs have gained traction among tech enthusiasts, they may take a little more time to break into the mainstream.
Economic factors play a part too. EV owners typically occupy a higher financial bracket. Compared to the average UAE resident, they're twice as likely to opt for premium versions of products and self-identify as “affluent” and three times more likely to own multiple real estate assets.
Their engagement isn't limited to purchases alone. EV owners are also more community-conscious. Compared to the average person, they're 30% more likely to prioritize community contributions and 69% more likely to view themselves as a public opinion leader.
These insights suggest that within the UAE's current landscape, EVs are still primarily favored by a small group of young, tech-savvy, and affluent consumers, leaving a vast segment of the broader market untapped. With the UAE’s sustainability focus and its commitment to green mobility transition through consumer-centric policies and enhanced infrastructure, the potential for EVs to dominate the wider market is high.
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Plugging into the Future: Saudi Arabia’s EV Ambitions
Saudi Arabia has seen a similar surge in public interest. This year alone, Saudi Arabia has imported more than 70,000 EVs, a significant increase from just a few years ago when the country had less than a thousand EVs.
A recent survey commissioned by General Motors reveals that 69% of adults in the Kingdom see EVs as a cost-effective choice in the long term. This perspective is shaping purchase intentions, with 63% of respondents seriously thinking about getting an EV in the coming years.
The Saudi government is introducing a series of measures to encourage EV ownership, such as tax exemption and subsidies for EV purchases. The Saudi Electric Vehicle Charging Infrastructure Development Initiative (SEVCIDI), launched in 2021, set a target of installing 50,000 charging stations across the nation by 2025 and laying the groundwork for growing EV adoption.
To further promote EV awareness, Saudi Arabia’s General Sports Authority has been hosting Diriyah ePrix, part of the electrically powered Formula E world championships, since 2018. As the first and only Formula E race in the Middle East, the annual event drew over 20,000 daily spectators last year.
The Saudi leadership, however, has more plans beyond driving EV sales. Ceer Motors, launched in November last year with the patronage of Crown Prince Mohamed bin Salman, is Saudi Arabia’s first homegrown EV brand. As a joint venture between PIF and Foxconn, a Taiwanese multinational contract manufacturer, the automaker is partnering with Siemens and BMV and aims to attract USD 150 million in foreign investment. It plans to roll out its first vehicle by 2025.
Beyond Ceer, the PIF is also collaborating with global auto giants like Hyundai to jointly develop EV manufacturing capacity in the country. These initiatives are designed to make Saudi Arabia an EV manufacturing hub in the coming decades.
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The UAE and Saudi Arabia are making bold moves in the green transition, each carving their own path in the EV landscape.
As the UAE gears up for COP28 this month, it’s positioning itself as a world leader in a post-oil era. With policies like the National Electric Vehicle Policy and the Net Zero by 2050 initiative, the country is swiftly transitioning to EVs, signaling its commitment to a carbon-neutral future.
The Abu Dhabi government launched the Smart and Autonomous Vehicles Industries (SAVI) cluster at Masdar City last month, which is expected to contribute between USD 24.5 billion to USD 32.7 billion to the national economy, and generate 50,000 jobs and accelerate the green mobility transition across the country.
Saudi Arabia is planning to leverage EV manufacturing as a part of a wider diversification push. Guided by its Vision 2030 strategy, the country’s leadership is preparing for a future centered on renewable energy, carbon-neutral transport, and advanced manufacturing.
In the words of Saudi Crown Prince Mohamed bin Salman, the country’s leaders are not just building EV factories; they’re “igniting a new industry and an ecosystem” poised for innovation and a sustainable future.
Judging by their actions, it looks like they’re already hitting the accelerator and charging ahead.