Electric dreams: What will it take to spark EV surge on UAE roads?

An electric vehicle charging tariff coming into force in the UAE next year has been tipped to accelerate growth in the market and support ambitious green transport goals in the years to come.

In a report published earlier this year, global consultancy company PwC highlighted that public charging infrastructure was the most significant bottleneck for rapid EV adoption in the UAE, with demand outpacing charging point availability.

Recent announcements from the government, however, suggest that infrastructure roll-out may be shifting up a gear – and leading the charge for electric car uptake.

On Thursday, government-owned electric vehicle charging network UAEV announced that it had set tariffs for the faster Direct Current (DC) chargers at Dh1.2 per kilowatt-hour, and for Alternating Current (AC) chargers at Dh0.7 per kilowatt-hour.

Before this, the EV charging services had remained free of charge since the tariffs were first announced last May.

To support EV drivers in locating the nearest charging station and to facilitate smooth payment, UAEV has also introduced a mobile application.

Sharif Salim Al Olama, Undersecretary for Energy and Petroleum Affairs in the Ministry of Energy, and Infrastructure, and chairman of UAEV said the update marks a transformative step in the UAE’s journey towards sustainable transportation.

“The implementation of standardised charging tariffs and the launch of innovative solutions like the UAEV app and 24/7 support reflect our continuing commitment to enhancing the EV driver experience."

By 2030, UAEV’s network will include 1,000 chargers located across urban hubs, highways and transit points within the UAE. Key locations will span across all emirates, with the aim of ensuring accessibility for both intercity and intracity EV users.

Earlier this month, Dubai Electricity and Water Authority (Dewa) announced that it now provides a network of more than 740 EV Green Charger points across Dubai. According to Dewa, a total of 16,828 customers had benefitted from the initiative’s services from 2014 until the end of September 2024.

Heiko Seitz a Partner and the Global eMobility Leader at PwC, told The National that the creation of a charging ecosystem in the UAE provides greater confidence in the market and will result in an increase in the number of fully battery electric cars.

Karim Maksoud, managing director of Al Habtoor Motors, agrees. He told The National that the UAE’s EV infrastructure is steadily improving, with more charging stations nationwide and growing support for EV-friendly policies. "However, for long-term success, there is a need for more widespread charging networks, fast-charging stations, and training for technicians to support EV maintenance," said Mr Maksoud.

It is estimated that about 10 per cent of vehicles on the road in the UAE are electric. Following the implementation of further charging infrastructure, PWC has forecast that sales of EVs will increase to 15 per cent by 2030, and by 2035, 25 per cent of new car sales will be electric.

The current UAE government target is to increase the share of EVs to 50 per cent of total vehicles on the roads by 2050.

"Only Saudi will have higher numbers, and that is driven by two factors. The first is regulation, especially in Riyadh, where royal decree demands that 30 per cent of new cars sold in Riyadh are to be battery electric by 2030, and that leads to our expectations that nationwide, in Saudi by 2035, 65 per cent of new cars sold are going to be battery electric." said Mr Seitz.

Commercial players are ramping up EV offering in-line with this growth. For example, Dubai Taxi Company is targeting to have about 13 per cent of its taxi fleet electric by next year. The Dubai listed transport operator this week officially launched a collaboration with e-hailing service provider Bolt. In a statement, Dubai Taxi Company shared with The National that 30 per cent of the fleet on the Bolt platform is electric.

Why is infrastructure so important?

Combating range anxiety is a key issue when it comes to rolling out EV infrastructure. Range anxiety refers to a drivers fear that the vehicle may have insufficient power to make it to the destination.

Until there are sufficient EV charging hubs across the country, plug-in hybrids offer a bridge solution towards electrification.

PwC forecasts that, going forward, plug-in hybrids will make up 30 per cent of the EV mix in the UAE – the remaining 70 per cent will be battery electric vehicles. "We will see a much bigger plug-in hybrid play in Saudi compared to the smaller countries like UAE, like Qatar, and Kuwait. In Oman we probably see more plug-in hybrids as well."

Could subsidies be the answer?

In Singapore, a nation notorious for having the most expensive cars on the planet due to a tax imposed for the right to own a car, heavy subsidies have been implemented to incentivise electric vehicle ownership. For example, those looking to purchase an EV in the city state in 2025 could receive up to S$40,000 (US$29,400) in rebates as part of a government initiative to drive greater EV adoption.

Similarly, in the past, the UK had introduced grants for low-emission vehicles to drive adoption of more sustainable alternatives. These grants were included by sellers as a discount in the purchase price.

However, in the UAE the cost of an EV and standard combustion engine vehicle are relatively comparable. "When you're a fleet operator, it's already 7 per cent cheaper to own and run an EV in your fleet than an internal combustion engine. There is no need to subsidise the car any more." said Mr Seitz.

In fact, with new brands coming into the market in the UAE and Middle East, PwC expects a price war between firms from China which currently dominate the mass EV market.

Another alternative to incentivise EV take-up, Mr Seitz posits, would be to use more of a stick rather than a carrot approach, and introduce a tax of high emitting vehicles.

What's available on the market?

According to PwC, more than 90 per cent of all models offered by dealers in the UAE are internal combustion engine vehicles. With new, EV volume entrants mainly from brands from China.

"There's hardly any month where I don't see a new Chinese brand being advertised or driving on UAE street streets." said Mr Seitz. "China will continue to lead the pace, and I don't see that changing in the future. Together with Tesla as a volume brand as well, we see that reflected here in the UAE."

Karim Maksoud, managing director of Al Habtoor Motors told The National that the company plans to expand its EV portfolio in the coming year, "introducing additional models to cater to the growing demand for sustainable transportation solutions in the UAE."