When Tesla opened its first luxury electric car dealership in the Middle East this summer, some auto industry insiders wondered — perhaps with good reason — ‘Why Dubai?’
Car culture in the emirate is not entirely based on gas-guzzling super cars belching down the highways or muscular four-by-fours off-roading over desert dunes. But it is definitely has a higher proportion of both than global averages.
And with high salaries and even higher carbon dioxide emissions, the Dubai lifestyle may not gel naturally with the thrift and environmental consciousness that has made electric cars popular in places like Seattle or Scandinavia.
More potentially alarming is the Arabian heat, which depletes batteries at a faster rate, conjuring up the scenario that a driver could be marooned on a baking highway shoulder somewhere.
This didn’t stop Tesla from making a big fanfare about its launch.
Peter Bardenfleth-Hansen, Tesla’s director of new markets, insists the move makes both business and practical sense, calling the UAE “a world leader in sustainable transport”.
“We’re here because we really believe the UAE is making a big difference. His Highness Sheikh Mohammed [Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates, and ruler of Dubai] has taken some incredible steps to ensure that the UAE is a beacon country. That is one of the main reasons that we have accelerated our entry into this market.”
The opening of another store in Abu Dhabi by 2018 shows they are “very focussed on ensuring this market becomes successful and meaningful,” he adds.
Tesla is not alone in its bid to bring electric cars to oil-rich lands.
General Motors, which is eyeing the UAE as a target for its new mass market electric vehicle (EV), the Bolt, says it too see huge potential in the market.
“General Motors thinks that there is an opportunity for electric vehicles here, certainly within the UAE and in the greater Middle East as well,” says Gary West, GM’s operations manager for Urban Mobility.
“There’s a number of enablers that need to happen, but certainly we see potential,” he says, listing infrastructure, legislation and a suitable regulatory environment, incentives to owners, education and ongoing research and development as factors.
“60 percent of the world’s population by 2030 will be living in a city, so that will drive more vehicles and pollution on the road. When there are more vehicles and pollution there’s more traffic jams.
So there’s some key macro issues.”
From a branding perspective, Tesla may have also made a smart choice by hitching its wagon to Dubai, says Rebecca Lindland from Kelley Blue Book, an auto trading consultancy.
Edgy new products help the city showcase itself as a paragon of innovation and style amid a wider region buffeted by strife and economic malaise.
“Tesla and Dubai go hand in hand,” she explains. “Here’s a fabulous performing vehicle that is beautifully designed, beautiful to look at, and potentially with a few compromises. A little like the Burj Khalifa, in fact.”
But with no way of charging your car remotely, and charging stations only just starting to appear around the city, some industry watchers warn that Dubai is not yet ready for the electric car revolution.
“There are ways to compensate for that, and that is through infrastructure. So that means charging stations, and a lot of them,” Lindland says.
Dubai currently has 100 electric charging stations installed in airports, gas stations, shopping malls, offices, hospitals, government and residential buildings around the city. Dewa has plans to increase the number to 200 stations by 2018.
Emirati Tesla owner, and sustainable transport pioneer, Ajlan Saeed from Abu Dhabi has been driving his Tesla Model S around the Emirates since 2014.
He says it’s not inconvenient, but adds that “My answer would be different if you asked me a couple years ago.”
When driving from Abu Dhabi to Dubai he drops his car at the Dewa electric charging station and gets an Uber anywhere else in Dubai, which also solves his parking woes. “The worst part of going to Dubai shopping malls on weekends is to bother with parking,” he says.
Saeed was an early advocate and crusader for electric car tech, penning a petition to CEO of Tesla Motors Elon Musk in 2015 demanding a Tesla store and service centre in the UAE.
“You have to change your mind-set a bit and understand and acknowledge that you’re going to start to drive differently from now on. There’s no gas stations so you have to top-up at home or at other charging stations.
“I mostly charge it at home, at night, regardless of the battery being depleted or empty. I just plug it in at the end of the day, and the next morning it’s full.”
Living in a villa, as Saeed does, may be a pre-requisite to owning an electric vehicle, Lindland says. Many Dubai residents and commuters live in high-rise towers in Dubai and Sharjah, and are lucky to have one socket per level in their underground parking.
“If you have an electric vehicle, you’d almost be required to have a charger at home, because the likelihood of going through even 250 kilometres of range in a day or two is pretty high, because you’re using so much of what should be fuel for the range, to actually keep the car cool.”
Tesla hopes to allay such fears by offering luxury EVs with the longest battery range on the market. And when asked how General Motors’ mass market EV, the Bolt, fares in the searing desert heat, West insists that high temperatures make no dent in performance. “We have conducted hot weather testing and the heat doesn’t affect the battery,” he says.
“We’ve got a product that will deliver 383km of range. That allows you to drive from downtown Dubai to Abu Dhabi and back and still have lots and lots of kilometres left.
So there shouldn’t be any range anxiety.
“With long-range vehicles like the Bolt, and with the infrastructure that the government is very focussed on developing, these concerns are being addressed,” he adds.
But while the new electric cars on the market are touted as mass market vehicles, the reality is that with an upfront price-tag of around $40,000 (AED147,000), the average customer will be someone with money in the bank, according to Lindland.
“Anyone who is acquiring a Tesla is really doing it for bragging rights. There are a lot more practical vehicles than a Tesla that you can get.
“I think there’ll be showpieces. It’s hard to have as your daily driver. You can have a Tesla on a commute level, but you’re not going to be taking this vehicle off-road.”
A gradual transition to electric cars may be a boon to the energy-rich Gulf states now more than ever, as the new technology has the power to not only save the planet someday, but also provide alternatives to oil and gas producers as oil prices have plummeted worldwide.
“Because it’s a region that is so dependent on exporting oil and natural gas, it’s ideal from an economic standpoint. The more efficient the country can become, and increase their exports, the better they’re going to be,” Lindland adds.
“They don’t want the global electric vehicle market to explode, but if they themselves can use less oil and fossil fuels and can export more, then that’s a benefit for them.”
Luckily for oil-producing states the electric car market is not large in any part of the world, from emerging markets China and India, to California, London and Dubai, Lindland says.
“It is in Scandinavia, Norway and Sweden but that’s because of incentives, where they’re subsidising the cost of the vehicle by about 70 percent,” she says.
In the UAE’s desert terrain and truck-based culture, where the government is yet to roll out perks such as subsidies and tax breaks, electric cars could continue to be a tough sell.
“Because of the lifestyle there, we do continue to see high performance vehicles. We continue to see truck-based SUVs as opposed to a car-based cross-over as we see in other parts of the world.”
Yet international renewables agency IRENA predicts that in the UAE, 14 percent of passenger vehicles could be plug-in hybrid or pure electric vehicles by 2030.
“Given the declining costs of production, for batteries in particular, electric vehicles are poised to transform the auto industry in the coming decades,” says Dolf Gielen, IRENA’s director of innovation and technology.
“Globally, we estimate there will be 60 million electric vehicles by 2030 and 200 million by 2050. However, this is a rather conservative estimate.
“With the right climate-friendly policies and market drivers in place, we could see over 200 million by 2030 and 850 million by 2050.”
All of which points to a market that is ready to charge up and accelerate the journey to a greener future.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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