Accelerating the EV revolution in the UAE

The future of electric vehicles looks bright. The latest projections from the UK-based Carbon Tracker Initiative suggest that EVs will account for 35% of road traffic by 2035 and as much as two-thirds by 2050, much higher than previous estimates.

But right now we are at an early stage of adoption. A range of factors, from image to infrastructure, means that for the time being at least EVs are the exception rather than the norm. And nowhere is that more the case than the UAE.

“Gas guzzlers still rule the road,” says Thomas Bosse, head of programmes at the Dubai Carbon Centre of Excellence. “If you look at the roads here, most people are still driving large-engine vehicles. One of the biggest barriers to accelerating growth in EVs apart from infrastructural constraints is that most customers hardly know they exist.”

It was to start breaking down some of these barriers in UAE that the Global Electric Vehicle Road Trip (EVRT) swung into town at the end of January for its first outing in the region. Over four days in late January and early February the EVRT team toured the roads of the seven emirates with its fleet of electric vehicles, along the way hosting a series of events aimed at blowing away any misconceptions of EVs as unworthy and dull.

For the event’s many high-profile sponsors, Emirates EVRT was an ideal platform to communicate to consumers and decision-makers that green mobility is the future. Karim El-Jisr is director of the Innovation Centre at Diamond Developers’ flagship Dubai project, The Sustainable City, which hosted the road trip's Grand Finale event.

“We firmly believe in an EV future,” he says. “Since the early planning phase of The Sustainable City (2010-2012), we considered clean mobility as one of the essentials pillars of sustainability and future cities. The EVRT event sounded like the perfect outreach opportunity to further promote the industry in Dubai and the UAE and it makes no sense to stand idle, but perfect sense to support it.”

It was also a great opportunity to focus minds on what still needs to be done to accelerate the mainstreaming of EVs in the UAE. Many of the essential links in the EV supply chain – infrastructure such as vehicle charging stations, proper insurance for vehicle owners and engineering know how to provide maintenance services for EVs – are still either missing or in short supply in the region.

But as was evident during the event, the impetus to begin addressing some of these gaps is beginning to gather momentum. AXA Insurance Gulf, for example, used the Emirates EVRT event to launch a first-of-its-kind insurance policy for EVs in the GCC region with its ‘Tesla Club Scheme’.

“I am very proud that at AXA we early on saw the benefits of the EV segment,” says Issam Mouslimani, AXA Gulf’s head of regional retail product offering. “Moving forward this will help us to have the highest market share for something that is going to definitely happen, whether we as insurance companies want it or not. It's going to happen!”

Another key element in the growth of the electric vehicle industry in the UAE and beyond is the necessary finance to support customers wishing to buy an EV. Again, this is a new area, but another of the EVRT sponsors, Emirates NBD bank, used the event to launch a new loan programme for prospective EV owners.

“While awareness and agreement to move to sustainable transport options such as electric vehicles are growing rapidly across the world and in the region, mass adoption can only start to happen with continuous support from a cross-section of institutions and organisations,” says Suvo Sarkar, senior executive vice president & group head – retail banking and wealth management at Emirates NBD.

“At Emirates NBD, the environment is a key part of our sustainability plan and we recently launched the Green Auto Loan that offers customers incentives to invest in an environmentally friendly vehicle. Customers interested in buying an electric or a hybrid car can avail an auto loan that offers a discount of 0.50% p.a. on interest rates (0.25% on flat rate) as well as a waiver of the full processing fee,” says Sarkar.

The emergence of dedicated finance and insurance products will undoubtedly be instrumental in oiling the wheels for the EV industry in the region. Until now, the absence of such options has deterred dealerships from setting up in the region and thus greatly limited the opportunities for individuals to purchase an electric car, even if they wanted to.

“We need more education and more charging infrastructure. But most importantly, we need EVs,” says The Sustainable City’s Karim El-Jisr. “Car dealers need to jump on the bandwagon and think long-term even if there is little profit to make in the foreseeable future. It is still difficult to buy an EV – you have to pre-book or ship it yourself.”

Happily, the wheels are beginning to turn for EVs at a policy level in the UAE. In 2016 the Dubai Supreme Council of Energy (DSCE) voted in favour of a new policy under which government organisations with large fleets of vehicles should start switching to hybrid or fully electric alternatives. And in January this year, the DSCE followed that up by setting a new target aiming for 10% of new vehicles bought between 2016 and 2020 to by hybrid or fully electric.

Policies such as these should have a big impact in helping local supply chains develop. Importantly too, Dubai and Abu Dhabi in the past two years have become regional leaders in renewable energy with plans for significant new volumes of solar PV capacity. This will greatly enhance the value of shifting to EVs as it means the power being used to charge their batteries will be coming from green sources and thus contributing to global emissions reductions.

While the 2017 Emirates EVRT highlighted how much needs to be done to accelerate the region’s adoption to EVs, it also demonstrated clearly that things are heading in the right direction.