As CO2 emissions from industries & traffic continue to severely impact the climate & the environment, Electric Vehicles (EVs) hold promise to mitigate this rapid climate change as they are carbon-neutral and do not run on fossil fuels. Worldwide, governments of various countries, including the UAE, are taking numerous initiatives toward encouraging the adoption of EVs while also providing buyers with tax rebates & redemption.
The UAE Electric Vehicle Market is expected to grow at a CAGR of around 28.5% during the forecast period, i.e., 2023-28. Currently, the market for electric vehicles in the UAE is at nascent stage. However, in the future, it is set to expand at a phenomenal pace owing to rising concerns over future energy savings & growing levels of greenhouse gas emissions on account of the massive consumption of fossil fuels and the ever-increasing traffic congestions. In addition, the mounting influx of tourists, migrants, & pilgrims in the country, i.e., leading to the rapidly booming car rental industry, is another prominent aspect projected to propel the electric vehicle market in the UAE over the forecast years.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Key Companies Profiled||Renault Group, Tesla, Chevrolet, BMW AG, Hyundai Motor Company, Nissan Motor Corporation, Ford Motor Company, Porsche Middle East & Africa, Toyota Motor Corporation, Ashok Leyland, Volvo Bus Company, One Moto, Others|
|Unit Denominations||USD Million/Billion|
Over the past few years, especially after the Electric Vehicle Green Charger initiative undertaken by the government of the UAE, public interest in EVs has surged dramatically. At present, the government is taking various initiatives toward encouraging the adoption of EVs in order to achieve its intended Green House Gas (GHG) emission reduction targets and address rampant environmental pollution & future economy-related fears.
Furthermore, the UAE Vision 2021 has also played a notable role in promoting EV adoption across the country. Almost 20% of government agency cars have been converted into EVs, and plans are in line toward attaining a fleet size of 42,000 EVs by 2030. Moreover, the UAE has one of the biggest charging stations-to-vehicle-ratios worldwide, with nearly 325 charging stations.
Automakers are massively investing in introducing advanced technologies to reduce EV charging time while providing incentives for buyers. Hence, as the number of EVs in the UAE is increasing, so is the need for reliable & convenient charging stations, i.e., creating new directions for automakers to develop the necessary infrastructure and stimulate the electric vehicle market growth in the years to come.
Key Driver: Active Government Efforts toward Attaining Carbon-Neutrality
In order to achieve carbon-zero targets and diversify the economy away from the overburdened oil & gas sector, the UAE government is taking various initiatives toward raising awareness among citizens about the benefits of electric vehicles and providing them with tax redemption or rebate. Hence, more & more people are shifting towards more automated & technologically updated electric vehicles, given the rising fuel prices and growing concerns over environmental degradation, thereby driving the UAE Electric Vehicle Market.
Growth Opportunity: Massive R&D Investments by Automakers in Improving EV Battery Performance
The burgeoning demand for luxury & premium cars in the UAE is creating profitable prospects for the leading players operating in the Electric Vehicle Market to invest in R&D in order to introduce innovations in both vehicles & battery technologies. To cater to the ever-growing base of EV buyers and enhance their comfort & convenience, automakers are actively working on developing high-capacity batteries and expanding the charging infrastructure. In addition, the increasing availability of mobile charging stations like charging vans, portable chargers, & temporary chargers where the infrastructure is not required is another notable aspect creating new directions for the UAE Electric Vehicle Market to expand significantly in the coming years.
Based on Vehicle Type:
Of these three, commercial vehicles are gaining traction in the UAE and boding well for the Electric Vehicle Market. It ascribes to the flourishing tourism, hospitality, & healthcare industries owing to the ever-increasing influx of migrants, pilgrims, medical tourists, etc., in the country, alongside the subsequently expanding car rental business. To handle the rising number of visitors, the government of the UAE is massively investing in infrastructural development projects associated with airport expansions, hotels, resorts, shopping complexes, hospitals, etc., i.e., infusing the demand for commercial electric vehicles in the country.
Also, the government is launching various programs to mitigate climate change, encourage green mobility, and achieve climate neutrality by 2050. The country is witnessing a rising penetration of electric buses in public transport fleets. Moreover, the rapidly booming e-commerce and transportation & logistics sectors are also amplifying the demand for zero-emission commercial vehicles in the UAE and, in turn, propelling the overall growth of the electric vehicle market.
Based on the Power Source:
Here, Hybrid Electric Vehicles (HEVs) are anticipated to witness significantly growing demand in the UAE over the coming years, principally due to more power, enhanced fuel efficiency, reduced emissions, and the excellent backup provided by them, which, in turn, enables long-distance driving with relatively less battery degradation. An HEV is equipped with both an electric motor & an ICE (Internal Combustion Engine), which provides owners with a backup power source when the batteries run out of charge. Their adoption in the UAE has surged drastically in the past few years, mainly due to the removal of fuel subsidies and the rise in petrol prices. Hence, in view of these trends, more & more people are showing active interest in switching to HEVs and, consequently, benefitting the electric vehicle market in the UAE.
Geographically, the UAE Electric Vehicle Market expands across:
Among all regions in the UAE, Dubai holds the largest share of the Electric Vehicle Market, and the same trend is likely during 2023-28. It owes to the active participation of the government, banks, & auto dealers through incentives, coupled with the ever-increasing environmental consciousness among people. Moreover, Dubai is taking several initiatives toward encouraging “Green Mobility” in order to reduce carbon footprints, especially in the transportation & logistics sector.
The emirate aims for 10% of its vehicles to be electric or hybrid by 2030. The DEWA (Dubai Electricity & Water Authority) has set a flat rate of 29 Fils a kilowatt-hour (kWh) for EV charging at their charging stations. It has also launched a free-charging incentive on its network to further promote green mobility within the city. These facts cite that Dubai has immense potential to become one of the world leaders in adopting EVs & other zero-emission vehicles, which, in turn, would boost the overall growth of the UAE Electric Vehicle Market in the coming years.
Recent Developments in the UAE Electric Vehicle Market:
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Frequently Asked Questions
A. The UAE Electric Vehicle Market is projected to register around 28.5% CAGR during 2023-28.
A. Growing concerns over the alarming levels of GHG emissions, rising fuel prices, and the mounting influx of tourists in the UAE are the prime aspects projected to drive the Electric Vehicle Market during 2023-28.
A. Renault Group, Tesla, Chevrolet, BMW AG, Hyundai Motor Company, Nissan Motor Corporation, Ford Motor Company, Porsche Middle East & Africa, Toyota Motor Corporation, Ashok Leyland, Volvo Bus Company, and One Moto are the key companies operating in the UAE Electric Vehicle Market.