The UAE’s EV impetus
From Chinese brands to government-backed initiatives, the market has potential despite the challenges that persist
The UAE’s adoption of electric vehicles (EVs) has gained significant momentum over the past few years, aligning with the region’s broader efforts to drive economic diversification.
This transition is integral to achieving ambitious environmental targets, including reaching net-zero emissions by 2050. These targets demand a large-scale overhaul of the mobility sector, driving it away from internal combustion engine vehicles towards widespread EV adoption.
Consultancy firm PwC estimates that by 2030, EVs will account for over 15% of new passenger car and light commercial vehicle sales in the UAE, representing approximately 58,000 vehicles.
By 2035, this share is expected to rise to 25%, translating to around 110,500 vehicles.
However, achieving this goal requires a robust infrastructure framework, policy support and technological advancements.
“The UAE’s EV adoption is constrained by the lack of incentives,” said Ajit Kumar, chief operating officer for commercial at Saeed & Mohamed Al-Naboodah Group.
“As a nation with a 90% expatriate population, the government carefully evaluates the impact of subsidising EV purchases, which has influenced the pace of adoption.”
Kumar’s comments came during a Mashreq MEED Automotive roundtable, where industry experts across the automotive value chain gathered to explore opportunities to accelerate EV adoption in the UAE.
The discussion emphasised the importance of establishing clear policies and enhancing infrastructure to effectively meet the growing interest in EVs.
Market penetration
Brands such as Volkswagen, Nissan, Hyundai, BMW and Tesla remain popular among local consumers in the region.
However, Chinese automakers are rapidly making inroads.
Initially capturing market share from South Korean brands such as Kia and Hyundai, Chinese manufacturers are now increasingly competing with Japanese, US and European players to gain consumer confidence.
In 2023, Chinese vehicles accounted for 14% of the UAE market share, a significant leap from just 4%-5% in 2022.
“In the UAE, the entry-level segment will be overtaken by Chinese manufacturers within the next two to three years,” said Kumar. “Their focus on affordability without compromising on technology makes them a formidable force in the region.”
Brands such as Nio, BYD, Changan, Geely and XPeng have gained popularity by offering a combination of advanced technologies, intelligent connectivity and cost-effective value propositions.
“Having ventured into the UAE market with entry-level models, the Chinese have also moved to compete across various price points, including premium SUVs,” said Oscar Rivoli, CEO at Al-Ghurair Motors.
Additionally, the UAE ranking eight globally in terms of electric mobility readiness presents an opportunity for Chinese EV brands to expand their footprint in the region by forming strategic local partnerships.
Nio, for instance, has secured a $1.1bn investment from Abu Dhabi-based investment vehicle CYVN Holdings to enhance its financial stability and drive business expansion. Similarly, last year, BYD partnered with local distributor Al-Futtaim to bring four of its all-electric and hybrid models to the region.
Chinese automakers’ ability to rapidly scale production and streamline processes sets them apart in the regional EV market.
“Some plants in China can assemble a car every 70 seconds,” said Karim Amer, head of automotive, heavy equipment and multinational trading corporates at Mashreq.
“This efficiency, coupled with aggressive export strategies, allows Chinese brands to dominate the entry-level EV market.”
According to the World Economic Forum, China’s EV exports surged 13,300% to $42bn between 2017 and 2023, accounting for nearly 70% of global EV production.
Despite increasing market penetration, EVs still make up just 1.3% of the total vehicle fleet in the Middle East.
Broader adoption continues to face challenges, particularly range limitations and a lack of adequate charging infrastructure, which are both crucial for facilitating long-distance travel and improving accessibility.
Overcoming barriers
Range anxiety remains a significant hurdle to EV adoption in the UAE, primarily due to the limited accessibility of charging networks across the region.
“The key to adopting electric mobility is strong infrastructure,” said Thomas Schulz, general manager for Mercedes-Benz passenger cars at Gargash Enterprises. “Challenges like pricing and declining car values are becoming less of an issue with updates and longer vehicle lifespans.”
At the current pace, PwC estimates there will only be 10,000 charging points in the UAE by 2035, highlighting the need for accelerated infrastructure development.
To address this shortcoming, the UAE government has launched several initiatives.
For instance, the UAE Ministry of Energy & Infrastructure, in collaboration with Etihad Water & Electricity, announced a joint venture called UAEV, a government-owned charging network aimed at expanding access to charging points.
Similarly, in October, under its new regulatory framework, Dubai Electricity & Water Authority (Dewa) issued its first independent EV charge point operator licences to UAEV, and Tesla, in line with Dubai’s commitment to achieve net-zero carbon emissions by 2050.
Adnoc Distribution is also playing a significant role, with plans to increase its fast chargers from 90 to 150-200 by the end of 2024 as part of its five-year growth strategy.
Furthermore, efforts to optimise EV charging infrastructure also include smart energy management to distribute power efficiently and balance loads across chargers, ensuring safe electricity delivery without disrupting other energy needs.
This is crucial for integrating clean transportation with low-carbon energy systems.
To achieve this, Dubai has reinforced its commitment to clean energy through initiatives such as the Clean Energy Strategy 2050 and Green Mobility Strategy 2030.
These plans include the EV Green Charger initiative, which aims to expand the charging network and promote the use of electric and hybrid vehicles.
Driving this transition is Dewa that intends to increase the number of green charging stations in Dubai by 170%, from 370 in 2023 to 1,000 by 2025.
Autonomous future
Autonomous technologies are the future and will shape the driver experience.
Consumers in the UAE are attracted to EVs that feature sleek, futuristic designs, advanced mechanical capabilities and cutting-edge digital innovations.
With its strategic investments in smart mobility, the UAE is well-positioned to integrate autonomy into its transportation landscape.
“Autonomy is already here,” said Kumar. “The obstacle lies not in the technology itself, but in legislation and public perception.”
In addition to legislative readiness, consumer education and exposure to autonomous technology will play a significant role in its adoption.
“Experiencing the technology firsthand – whether through test drives or short-term ownership – can help demystify autonomy for the average consumer,” said Chad Wellman, chief finance officer for Africa and the Middle East at General Motors.
Companies such as Tesla have already blurred the lines between EVs and autonomous systems, offering features like self-driving modes and advanced artificial intelligence integration.
Autonomous EVs, which have gained traction globally, is being increasingly embraced by the region.
For instance, a partnership was signed to bring China’s WeRide autonomous vehicles onto the Uber platform, starting in the UAE with an initial rollout in Abu Dhabi. This collaboration will allow Uber users to opt for WeRide’s self-driving vehicles, further advancing autonomous mobility solutions in the region.
WeRide, which already operates the UAE’s largest robotaxi fleet, also secured the country’s first national licence for self-driving vehicles, enabling it to expand operations nationwide.
This shows how advanced autonomous technologies will be integrated into transport networks in the foreseeable future.
“In the future, private car ownership may decline as shared autonomous mobility solutions like robotaxis gain traction,” said Benjamin Asher, global head of automotive at GlobalData. “Cities like Singapore are already planning for a future without widespread private car ownership by 2035.”
Similar to other metropolitan cities, the UAE boasts modern infrastructure, advanced technology and relatively contained urban environments, making it ideal for adopting both electric and autonomous vehicles.
However, realising this potential will require government support to standardise technological infrastructure and ensure that adoption is both affordable and accessible.
