UAE Electric Vehicles Market Fundamentals
The UAE electric vehicle market is valued at USD 2,969.72 million and is expected to reach USD 82,218.83 million by 2032, growing at a CAGR of 45.84% during the forecast period 2024-2032
The UAE is making significant efforts to develop electric vehicles (EVs). The government has set a target of having 42,000 EVs on the road by 2030 and has already converted one-fifth of government agency cars to EVs. This commitment can be seen in the country’s recognition as being among the top 10 globally in terms of EV readiness.
To promote EV adoption, the UAE has invested heavily in charging infrastructure. The number of EV charging stations over the past three years is expected to continue this growth, as Abu Dhabi alone plans to establish 70.000 charging points by 2030. Authorities and private companies are also working together to improve charging technology in order to reduce charging times. In addition, there is a growing demand for electric vehicles among consumers in the country; studies have shown that around 30% of the population is considering purchasing an electric vehicle due to the desire for a “green” mode of transportation. Currently, passenger cars dominate sales, with about 95% of the market, and leasing companies are also turning to passenger cars.
In addition to government initiatives, various macroeconomic factors are driving the growth of the electric vehicle market in the UAE, such as concerns over future energy security and efforts to mitigate climate change, which makes this type of transportation more attractive; rising prices of conventional fuels coupled with the need to conserve electricity is also significantly increasing the demand for these vehicles among Emiratis; furthermore, due to the booming tourism industry, sustainable tourism options are highly sought after, thus acting as another key driver for sales growth in Dubai, which is set to retain its position as the national leader till the end of 2030, closely followed by other regions such as Sharjah, which have few sustainable travel options but have a wide distribution of charging stations, mainly along the highways.
UAE Automotive Market Dynamics
Driver:Increasing affordability and cost-effectiveness
The key driver for the electric vehicle market in the UAE is the increasing affordability and cost-effectiveness of electric vehicles (EVs). In recent years, the cost of purchasing and operating an EV has decreased significantly, making EVs more accessible to a wider range of people. The UAE is now the fourth most affordable country in the world for charging EVs, and with consumers potentially saving 88% on fuel costs by switching to electricity, the low cost is driving demand for such vehicles – and the falling price is a game changer in terms of making EVs more widely available. For example, at current gasoline and electricity prices in Dubai, the key factor in purchasing. The change in prices over the past five years has been transformative – buying and driving a Tesla Model 3 costs $0.34 per kilometer. This brings them closer in price to matching traditional gasoline-powered models. In fact, in the UAE, it’s now 40 percent cheaper to drive an electric car than a similarly sized gasoline vehicle.
Government subsidies and incentives have also played a role in lowering costs for buyers in the UAE’s EV market. Among other benefits, EV owners across the country can take advantage of perks such as free parking spaces and exemptions at collection points. In Dubai, authorities are even waiving charging fees at public stations until the end of 2023. These incentives, coupled with the savings inherent in EVs that cost less to run, are increasingly making battery-powered vehicles an attractive option for consumers in the country, and the falling cost of batteries is also helping to dry down the overall purchase price – batteries are still one of the most readily affordable components of an EV’s powertrain, but they are becoming much cheaper over time, largely thanks to economies of scale brought about by mass production and a shift in the price of related technologies. economies of scale and advances in related technologies. Battery chemistry has dramatically increased energy density, which reduces the volume required, which in turn reduces material consumption and ultimately lowers unit costs. From 2010 to last year alone, the average price of a battery pack dropped by an impressive 89%.
Trend: Strong focus on expanding charging infrastructure
The electric vehicle charging infrastructure in the AU EV market is booming, with 800 charging stations projected by 2023, a 60% increase in one year, thanks to government support to drive EV penetration, with Dubai deploying more than 300 charging stations through DEWA. The country has both private and public charging facilities, including those in shopping malls, hotels and even homes.
The UAE has ambitious goals; it aims to have 42.000 electric vehicles on the road by 2030 (government fleet) and to convert one-fifth of its official vehicles to electric. This includes programs such as Dubai’s Green Charging Post Program (offering free access until 2023) and Abu Dhabi’s free parking/toll exemption for EV owners. The private sector is also active in this area; for example, leading developers such as Maid Al Futaim are installing charging piles, while utility providers DEWA and ADNOC, are working together to expand the network in the Affiliate Electric Vehicle Market.
With technology also playing a vital role – DEWA is piloting solar charging stations for the first time in 2020, and is exploring other initiatives such as faster charging solutions through partners such as SRTIP – there are many reasons to be optimistic, with the government’s continued commitment, coupled with the continued participation of businesses, and with the United Nations estimating that demand in the Emirate of Abu Dhabi alone is expected to increase by 2030. With demand in the Emirate of Abu Dhabi projected to be as high as 70,000 points by 2030, and more than half of the world’s population residing in the Emirate of Abu Dhabi according to United Nations estimates – there is no better place to be positioned globally. The region is now known not only for its deep roots, but also for being blessed with the natural and geographical conditions necessary to be a leader in the international market, not only in manufacturing, but also in supplying equal opportunities with the rest of the world, including the world’s leading manufacturers. manufacturing, but also equal access to a wide range of products related to clean energy transportation systems, including electric-powered motor vehicles.
Challenge: Developing a Dealer and Maintenance Network
Developing a strong dealer and maintenance network is the biggest challenge to the growth of the electric vehicle market in the United Arab Emirates. Currently, there are 800 charging stations, which will increase to 70,000 by 2030 to support the 30% of all vehicles on the road that are electric. However, this is still not enough, as there are no readily available options for selling and servicing cars. Only about 10 percent of car dealerships sell electric vehicles, limiting access to and understanding of electric vehicles. This lack of exposure is further exacerbated by the lack of trained salespeople who are able to answer questions related to such vehicles; this also acts as a deterrent to buyers who want the individual to know what he/she is talking about when making a purchase decision. In addition, potential buyers are concerned about the limited number of qualified mechanics in the field.
The UAE EV market is in dire need of an improved EV service network. Currently, only 15% of repair stores have technicians trained in how to handle such cars; as a result, the average waiting time before booking an appointment is around seven days, compared to two days for a regular dedicated car service. This means that the few EV repair stores are taking longer than usual because they don’t have enough staff to fix EVs or even deal with unique issues like battery replacements.
Additionally, the limited availability in the EV market goes beyond service delivery itself, consider the fact that small repairs require $5,000-$50,000 worth of diagnostic equipment, limiting its use due to the high cost factor associated with it. Even diagnostics alone can be expensive if you want to have your own dedicated center nearby – only one in five vehicle owners has such a facility within a reasonable range (less than 20 km radius). In addition, there are not many models of different makes, so the choice is limited. In fact, only 500 people have been trained so far, but the government hopes to train 5,000 technicians over the next five years.
Astute Analvtica sees a need to inject about $200 million into dealerships. It is estimated that a well-established network could increase adoption by 25% over the next five years.
UAE Automotive Market Segmentation Analysis
By type
With the largest share of pure electric vehicles (BEVs) (65.46%), the UAE is leading the way in EV development. The city’s EV market is expected to grow by 75% by 2025, with pure EVs increasing from 7.331 in 2023 to 12.852. Ambitious plans to drive this growth include having an all-electric fleet of taxis by 2027 and an all-electric taxi fleet by 2030. Ambitious plans to drive this growth include a fleet of all-electric cabs by 2027 and a fleet of up to 4.000 self-driving all-electric cabs by 2030. Dubai recognizes that mileage concerns are an issue and is building its base charging infrastructure accordingly; by the end of this decade alone, communities across the UAE will have built national ultra-fast charging corridors and more than 70,000 charging points. In Dubai alone, there are thousands of public stations in operation, more than the number of existing stations.
By model year
Concerns about the environment and practicality have fueled enthusiasm for SUVs in the United Arab Emirates, which has spread to electric vehicles (EVs). With a 43.22% market share, SUVs dominate the EV market more than any other type of vehicle, and these vehicles are ideal for large families because of their spacious interiors and ample cargo capacity, which makes them a good fit for buyers looking for a customizable EV – 33% of buyers want a preconfigured option, compared to 20%. This focus on practicality also reflects well on the UAE’s family-centric culture. In addition to being a symbol of wealth (which is 50% more likely among the wealthy), SUVs are also associated with general status in life – a tendency that suits wealthy individuals who prefer well-known brands such as Mercedes-Benz over specialized manufacturers such as Tozilla when it comes to purchasing heart-type vehicles. vehicles because they are most likely to best meet their needs.
The UAE government has fueled the growth of the electric vehicle market by actively encouraging its citizens to purchase electric vehicles through a variety of incentives, such as free parking spaces and reduced registration races. These measures serve two purposes:First, to make eco-friendly cars more attractive by offsetting the higher initial cost of gasoline-powered vehicles; and second, to discourage the use of private vehicles altogether. The advantages of electric SUVs such as deep intermittent torque, smooth acceleration and quiet driving have attracted many car owners in the country. The government is also committed to building charging stations across the country, with plans to build more than 70,000 charging stations by 2030.
By Charging Type
The UAE is stepping up the development of its electric vehicle charging system to cope with the rapid spread of electric vehicles. In which the general charging station segment will account for 68.38% of the EV market by 2023, with the current number of charging stations starring over 620, with a target of 1,000 by 2025 and 10.000 by 2030, spearheaded by the Dubai Electricity and Water Authority (DEWA), with more than 300 green charging stations in Dubai, capable of serving more than 600 EVs at a time. This impressive infrastructure is expected to grow further and is expected to reach 2.000 stations by 2025 .
Regular AC charging posts are readily available in the UAE EV market, while some strategically placed DC fast-charging posts allow for rapid charging. In Dubai alone, there are more than a dozen green charging stations with fast-charging capabilities that can fully charge an electric car in just half an hour, and the distribution of these stations prioritizes major cities and highways – this is intentional, as Dubai and Abu Dhabi have the highest density of charging stations, meaning that the location is ideal for both the daily commute and sometimes long-distance travel. So not only do most people expect them to be located along their routes, but depending on their energy level, they need them most often during the day or night.
A recent survey conducted showed that 40% of respondents plan to purchase an electric or hybrid vehicle within the next two years. This shows just how great the actual demand is for things like new cars that run on electricity rather than gasoline.
By power output
Electric vehicle (EV) charging systems in the River Associates EV market are dominated by charging piles under 100 kbps, with a base market share of more than 51.1% by 2023. Heart-type charging piles, which typically have a low-drying output of 100 kW, are inexpensive, low-cost, and easier to install than DC fast-charging piles, and are ideal for use at home or at work, where cars can be left for long periods of time. Overnight charging with a typical Level 2 AC charging post can significantly increase the range of an electric vehicle. 7 KW, charging posts can allow the base to travel an additional 25-30 miles (40-48 km) per hour: while a heavy-duty 22 KW power supply can provide another 90 miles (145 km) of range.
Dubai and Abu Dhabi have been leaders in the adoption of electric vehicles, and they are following this trend perfectly. In Dubai, DEWA has more than 30 Level 2 charging stations with outputs ranging from 11 kW to 22 kw, while Abu Dhabi has about 250 charging stations, primarily using charging posts below the maximum Level 2 charging posts, which are rated at roughly the same power as those in Dubai (22 kW). These slow chargers meet the needs of the majority of the AU EV market because they are designed for nighttime charging when electricity is cheapest and are supported by government incentives, such as free parking and toll exemptions on certain highways, which makes it attractive to place them in homes or businesses.
Level 2 AC charging posts have a much smaller impact on the grid than DC fast charging posts, as their lower power output means they use fewer resources. This makes them a more environmentally friendly and sustainable option, allowing for greater distribution in cities such as Dubai or Abu Dhabi. Widespread availability is critical to support growth in this segment, which tends to cater primarily to daily drivers who commute from the suburbs to the city each day, where there may not be any alternative to plugging the car into a pewter socket each night.
The National Electric Vehicle Policy reflects the country’s commitment to provide easy access to charging infrastructure, which is driving the expansion of the electric vehicle market. It sets clear guidelines for Level 2 AC charging posts, ensuring compatibility with all models sold across the country, and the dominance of these types is in line with global convergence pads, while also making it easier and more convenient for those who want to charge their cars outside their own homes, but still need to be nearby not too far away.
