DUBAI, UAE — The electric vehicle (EV) market is gaining momentum in the Gulf Cooperation Council (GCC), with the United Arab Emirates (UAE) leading the charge, according to a recent report by CARS24. The report reveals a 60 percent surge in online searches for EVs in the first half of 2023 compared to the latter half of 2022, indicating a growing interest in sustainable transportation.
Despite EVs currently constituting just over 1 percent of the UAE car market, the report suggests that the shift towards electric mobility is becoming increasingly popular among car buyers. This trend aligns with the UAE’s strategic push towards electric mobility, underscored by Dubai’s recent announcement to expand its electric charging station network by 170 percent by 2025.
The UAE’s readiness for e-mobility is further evidenced by its global ranking. Research by Arthur D Little places the UAE 8th on the global readiness scale for electric mobility. Factors such as improving infrastructure and rising fuel prices have contributed to an increase in drivers considering EV purchases.
The EV market in the UAE is projected to grow at a compound annual growth rate of 30 percent between 2022 and 2028. Passenger vehicles, driven by an increase in rental car services and limited potential for commercial cars in transport and logistics, account for approximately 95 percent of the UAE’s electric car market.
The UAE’s commitment to sustainable transportation is also reflected in its robust charging infrastructure. The country boasts one of the highest ratios of charging stations to vehicles globally, with 325 charging stations nationwide. This network has grown since the launch of Dubai’s EV Green Charger initiative in 2015.
To further incentivize EV usage, the Road Transport Authority and the Dubai Electricity & Water Authority are developing benefits such as free parking, toll exemptions, and reduced registration fees. The authorities aim to eliminate all emissions from public transportation by 2050.
In line with the UAE’s transition to a circular economy, the region’s first EV and battery logistics center has opened in Dubai’s Jebel Ali Free Zone, ensuring a stable supply chain for sustainable transportation solutions.
Over 30 percent of UAE residents are considering purchasing an EV, viewing them as better value for money than conventional vehicles over their lifespan, according to Arthur D. Little’s research. Abhinav Gupta, Gulf CEO at CARS24, attributes this growing demand to rising fuel prices and increased environmental awareness. “EV demand is expected to grow 30 percent annually until 2028”, said Gupta.
The CARS24 H1 2023 report also highlights the robust UAE used car market, with three pre-owned vehicles purchased for every new car sold. The UAE’s growing population, currently around 10.2 million, has fueled this demand.
The pre-owned car market has seen significant growth, particularly among millennial car buyers aged 25-44. This demographic has increased by 20 percent in H1 2023 compared to H2 2022. Young consumers are increasingly aware of the costs associated with owning a new car, with budget considerations and trust in the auto retailer playing a crucial role in their decision to purchase pre-owned vehicles.
The UAE is emerging as a prominent marketplace for pre-owned vehicles. By the end of 2027, the country’s pre-owned automotive sector is expected to exceed a net valuation of US$28.98 billion. This growth, coupled with the UAE’s vision for a sustainable future, paints a promising picture for the country’s automotive industry.