Infrastructure critical for EV adoption
Strategies for supporting the transition to electric vehicles
China’s dominant position in the global electric vehicles (EV) market is no surprise, fuelled by strategic government support, burgeoning domestic supply chains and assertive export strategies. This robust foundation serves as a model for other nations aiming to bolster their EV industries.
According to GlobalData, total China light vehicle exports in 2023 were 4.2 million, up from 2.9 million in 2022. Of the 2023 total, 4 million were passenger vehicles; of those, just over a quarter were new energy vehicles, covering battery electric vehicles, plug-in hybrid electric vehicles and extended range electric vehicles.
In the UAE, Chinese automakers have rapidly gained traction increasing their market share to approximately 14% in 2023, up from 4-5% in 2022. Brands like NIO, BYD, and Xpeng are becoming prominent players, with NIO recently entering the market in October by launching its EL8 luxury crossover SUV.
A core reason for China’s emerging dominance is price. “Despite the imposition of import tariffs, Chinese EVs are priced lower than comparable models in the West,” said Benjamin Asher, head of automotive at GlobalData.
“The affordability of Chinese EVs is forcing global brands to lower prices to compete, reflecting China’s strengths in localising production and streamlining supply chains for cost efficiency.”
This is important because the successful transition to EVs requires bringing more affordable models to the market. According to the International Energy Agency (IEA), in China, over 60% of electric cars sold in 2023 were already priced lower than comparable combustion engine models, making EVs more accessible. In contrast, EVs in Europe and the US still cost 10%-50% more than their gasoline counterparts, varying by country and vehicle segment.
Chinese automakers benefit from a significant cost advantage driven by lower labour costs, large-scale production, substantial government subsidies and competitive battery pricing.
Asher’s comments came during a Mashreq MEED Automotive roundtable that brought together industry experts to discuss how China has emerged as a global leader in EVs, largely due to its ability to offer affordable models.
Although cost is a key factor in EV adoption, reliable charging networks, robust grid infrastructure, battery-swapping stations, renewable energy integration, and supportive policies and incentives are just as critical.
Policy and standardisation
The World Economic Forum forecasts that by 2040, there will be around 240 million passenger EVs on the road.
Policy support through purchase incentives, preferential access, infrastructure funding and various perks will play a key role in driving EV demand and interest.
China does this well. According to a KPMG report, Beijing promotes EV adoption by offering financial incentives, involving state-owned electric utilities and requiring building owners to install charging stations.
Elsewhere, global tax incentives are a significant driver in encouraging consumers to choose EVs. Norway, for example, provides a full exemption from value-added tax and registration fees on EVs, leading to nearly 95% of new car sales being electric in 2023 – the highest global market share. Similarly, India has reduced the tax rate on EVs to 5%, compared to the 28% levied on traditional vehicles, to boost their adoption.
As policy frameworks drive the initial adoption of EVs, standardisation plays an equally crucial role in ensuring a seamless user experience and operational efficiency.
“China’s scale and commitment to standardisation gives it a competitive edge in democratising EV access,” said Jagdish Parulekar. chief financial officer at Al-Habtoor.
Standardising components such as charging ports, payment systems and communication protocols between vehicles and the grid simplifies the charging process, making EVs more accessible and convenient for a broader audience.
The European Union (EU) is mandating a universal charging infrastructure with standardised connector types, especially the CCS2 (combined charging system) connector, which is now standard for all new EVs sold in Europe.
Following this trend, countries such as Australia, India and parts of Southeast Asia are also transitioning to or adopting CCS2 as the primary connector for public charging stations, aiming to enhance compatibility across regions and support seamless EV usage.
“Government incentives are increasingly directed towards Chinese automakers due to their investments in advanced EV technology, which aligns with local clean energy and sustainability objectives,” said Asher.
China has standards in place for battery recycling, to ensure that used batteries are handled safely and can be repurposed or disposed of in an environmentally friendly way. Likewise, the Government of India has introduced regulations to ensure the safe disposal and recycling of EV batteries, setting standards for the recovery and reuse of critical materials such as lithium and cobalt.
Charging points and grid upgrades
“Chinese EV makers are rapidly reducing range anxiety and creating accessible EVs by leveraging their scale and technological prowess,” said Oscar Rivoli, CEO of Al-Ghurair Motors. “Their ability to quickly adapt to consumer demands – often implementing changes within months – demonstrates an unmatched agility in the market.”
This is reflected in the country’s charging network, which surged to reach 3.05 million public charging points by May this year and delivered 4.14 billion kWh of electricity that month alone to power its growing fleet of buses and passenger vehicles.
Other countries are similarly ramping up their charging infrastructure.
The EU has set an ambitious target of one public charger for every 10 EVs.
The IEA notes that in the US, where EV ownership is on the rise, a federal initiative aims to establish 500,000 public chargers by 2030, backed by $7.5bn in funding.
Consulting firm PwC further estimates a significant increase in total charge points in the US, from around 4 million today to an estimated 35 million by 2030, to meet the growing demand of the EV market.
To accommodate the rising demand for EV charging and maintain grid stability, strategic investments in grid upgrades are also essential. Without these upgrades, the added load could lead to power outages and system instability.
The UAE’s National Electric Vehicles Policy, which seeks to establish a robust network of EV charging stations in collaboration with federal, local and private partners, estimates that 45,000 charge points will be needed by 2035 to achieve the country’s EV adoption goals.
Implementing smart grid technologies, such as real-time analytics, demand response and vehicle-to-grid integration, can help manage charging demand more efficiently and enhance grid resilience. These investments not only support reliable EV integration, but also protect the electrical infrastructure against fluctuations in demand.
Additionally, expanding charging infrastructure in workplaces and public areas will be essential to alleviate range anxiety and boost EV adoption, particularly for those without access to home charging.
“Installing EV charging facilities has become a crucial amenity to attract tenants, although full coverage in every building may be restricted by power availability,” said Mahesh Rohra, chief strategy and planning officer at AW Rostamani Group. He added that several property developers in the region are now incorporating EV chargers as a standard feature.
For example, earlier this year BMW Middle East and real estate developer Emaar Properties partnered to expand EV charging infrastructure across key UAE locations, aiming to install over 50 charging points at more than 25 Emaar developments.
Ultimately, as EV adoption continues to soar, the expansion and enhancement of charging infrastructure and grid capabilities will be paramount.
China is anticipated to maintain its lead, accounting for around 70% of global charging infrastructure. However, countries such as the US and those within the EU are setting ambitious targets to establish vast networks of public chargers and ensure infrastructure growth keeps pace with EV market needs.
