The car industry is in a state of flux. It might not be readily apparent amid the sculpted, wind-tunnelled uniformity of modern car design, but we’re in an era that’s as transformative as that ushered in by Henry Ford and the mass production lines that brought us the Model T in 1908. Under the hood, the gas-guzzling, internal combustion engine’s days are numbered. Fossil fuels are out, and electricity is in.
India, which is set to be the world’s third largest car market within five years, became the latest country to publicly state that it plans to only sell electric cars in 2030, following plans announced by numerous European countries.
Car manufacturers, facing an increasingly challenging market in the Gulf region as sales figures stall, have been quickly adapting to the new landscape, encouraged by multiple cost-saving incentives.
Nissan is no different. The Japanese car manufacturer has been at the forefront in the development of electric cars, launching its signature Leaf model in 2010.
The familiar compact, hatchback design has been popular with customers and Nissan was able to announce in January that it had just shipped its 300,000th unit – confirming its position as the best-selling electric vehicle in the world.
To date, the Leaf has yet to appear in a Middle East showroom. That’s due in no small part to the lack of infrastructure – the charging units, mainly – but also making sure it is adaptable to the climate and conditions.
But that’s all changing, particularly in the UAE where government-related bodies have rolled out multiple charging points. Once a bastion of large-engined, multi-pistoned vehicles, the UAE is embracing the global trend and is now installing the infrastructure that will make electric vehicles feasible here.
“If you look globally, the electric vehicle market is evolving quickly,” says Kalyana Sivagnanam, president for Middle East and regional vice president (marketing and sales) for Africa, Middle East and India at Nissan. “It was time for us to say that this market is ready, because a few years back people saw it as an area that’s oil-rich, so why would we think of introducing electric vehicles here?”
Sivagnanam thinks that the difference is that customers across the world are now not just thinking of oil, but also about the environment and sustainability. “The customers here are no different in the way that they look at green issues and sustainability. So we wanted to bring the Leaf here.”
When it comes to infrastructure, Sivagnanam says the progress made in Dubai makes it an ideal market to launch the Leaf. The vehicle, however, won’t be available in the UAE – where it will launch initially – “until sometime in Q3.”
“We launched this product in Japan, with prices of around $30,000,” he says, when asked about a price-point here. “It’s too early for me to give you a figure, but you can expect it to be in that range, maybe a little bit more because of other reasons, because we’re trying to make this car what we call ‘homologated’ for the Middle East. It’s a technical term for making it fit for the high heat and the sandy conditions. That’s the reason you see the delay between launch in Japan.”
He says that other countries in the region might have to wait until 2019 for the Leaf, as Nissan continues to test the car for “different operating conditions”. But demand is nonetheless strong for the mass-produced vehicle. “The entire Middle East is probably going to be what I would describe as quick adopters,” he says. “What was interesting was in the last few months we have had enquiries for electric vehicles from almost all the countries in the GCC. There’s a lot of interest from the other countries like Saudi, Kuwait and Oman. Everybody is at some stage of planning to get into the electric vehicle space.”
Dubai has installed 100 charging stations around the emirate, with a commitment to double that total by the end of this year. “You’re not going to have fully-fledged infrastructure overnight,” says Sivagnanam. “It hasn’t even happened in the markets where electric vehicles have been there for a number of years.”
He thinks Dubai is probably in a better position to develop its infrastructure quicker than other cities, thanks to the vision of its leaders, its relatively small size, and the way consumers like to adopt new technology. “You can see this, not just in the electric vehicle infrastructure development, but in everything Dubai has done. The city has developed very quickly and very efficiently. Is the infrastructure as of today enough? Obviously not, but is it going to come quickly? I can think we can foresee that it will.”
The next step, he argues, is for proper charging points to be set up in private homes, office car parks and shopping malls. “If you look at an ideal infrastructure set-up, it would be that every home with a garage or parking space has the means to charge overnight. And in public parking areas you have a certain portion of the bays dedicated to electric parking.”
Complicating matters slightly, vehicles can use long and quick charging stations. The latter, he says, are generally not very good for battery life because there are only so many cycles you can do, which therefore requires a combination of both.
Sivagnanam says that, ultimately, it’s a question of how quickly the infrastructure grows, and how quickly the demand for this infrastructure rises.
By that stage, Nissan will be well into its Expo 2020 agreement that will see it supply somewhere in the region of 1,000 vehicles of varying size – one third of which is expected to be electric.
Sivagnanam describes the partnership as a “perfect fit” for Nissan. “We feel very privileged to be part of Expo 2020,” he says with evident pride.
The idea of pitching to become an official partner came when the Nissan team saw its objectives. “They are looking at mobility and sustainability as two of their three themes, and that's exactly what Nissan is trying to promote. We’re trying to promote future intelligent mobility and also sustainability.”
Massive changes are also afoot in the way cars are driven – or not driven as the case may be. The industry is taking initial steps to developing fully autonomous vehicles. Dubai, often an early adopter of new technologies under its ruler, Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has taken the lead and launched a plan to have 25 percent of cars on the roads be driverless by 2030.
That target might seem overly ambitious, but there is a compelling economic argument for ensuring it happens. The government thinks the policy could yield $5.9bn in annual economic revenues by reducing transport costs, carbon emissions and accidents, and raising productivity, as well as saving hundreds of millions of hours wasted in conventional transport options.
Nissan is also aware of this potential. Under the umbrella Nissan Intelligent Mobility, the Japanese manufacturer is taking vehicle transport a step further, with the ultimate aim of introducing fully autonomous driving. The unit has developed “Propilot”, which enables single-lane automated driving on highways. Currently available on Serena minivan models sold in Japan, the plan is to roll it out in countries where legislation allows.
The company also tested a breakthrough autonomous ride-hailing service on public roads in Japan last March, aiming to officially begin “robot taxi” rides in the early 2020s.
Sivagnanam confirms that there are plans to bring Propilot to the region, but no exact timelines as yet. “Sadly, I’m not able to give you a time, because it’s being tested and it involves a lot of infrastructure requirements,” he says.
While Dubai has concrete plans to bring in autonomous driving to complement its self-driving Metro, the regulatory framework will still take time to materialise. “It’s a combination of various things, like infrastructure and legislation; it’s not just a technology issue,” says Sivagnanam of the delay. “I would say the technology is far ahead of the legislation. It’s very hard for us to estimate when this will be ready for the roads.”
While the Leaf might be hotly anticipated, Nissan continues to perform well in the UAE. The company had 17 percent market share in 2017, a three percent increase over the previous year. “The Patrol was recently voted as having the best residual value of any car in the market,” says Sivagnanam. “The traditional range is still doing really well.”
He believes VAT will have a minimal effect, describing it as “neutral”.
“I can only give you feedback from our showrooms, and so far they don’t see any major impact. We hadn’t seen an increase in people buying cars before VAT began, nor have we seen customers complaining that this is a burden.”
Looking ahead to 2018, Sivagnanam says Nissan will continue to focus on creating products that meet the differing needs of customers in all its markets. “For example, the Super Safari is practically designed for the Middle East. Since its relaunch, it has done really well. We want to be more local, but by using all of our global assets. That’s where we will grow.”
He develops his point by explaining how Nissan will adapt more of its global technologies to the local market, including the Leaf, which he says commanded more attention at Dubai’s Motor Show last November than any other product, including the GT-R Nismo supercar.
“People want things that are more relevant to themselves, and the launch of Leaf is a step in the right direction,” he says of the growing demand for electric cars. “This will be one of the things that will drive the future of the industry here.”
Buying an electric car might make sense financially as well as ecologically
Dubai has introduced a series of incentives for prospective electric car owners, including the offer of being allowed to charge vehicles for free at Dubai Electricity and Water Authority’s public stations until the end of 2019.
As part of a series of enticements announced by Dubai’s Supreme Council of Energy to encourage more to invest in the energy efficient models, Dubai’s RTA will also give free parking places designated for electric cars, exempt owners from paying Salik (toll charges) and provide an exemption from RTA electric vehicle registration and renewal fees.
The cost of charging a vehicle in the emirate was already at a lower rate of 29 fils per kilowatt, which is a significant saving, compared to fuel-powered cars, which has seen the electric car sector grow by about 30 percent between 2014 and 2016, according to DEWA officials.
Government institutions in the emirate will also contribute to the growth of the electric vehicle market, having committed to buying 10 percent of all newly-purchased electric or hybrid cars from 2016 to 2020. The proportion of electric and hybrid cars will rise to two percent by 2020, and 10 percent by 2030.
Nissan is at the forefront of a new form of public transport
Nissan is set to test an autonomous ride-hailing service on public roads in Japan in March, aiming to officially start the “robot taxi” rides in the early 2020s.
The carmaker will put two Leaf electric cars, equipped with sensors and cameras and autonomous driving software developed by DeNA Co., on roads in a designated part of Yokohama, where Nissan is based. Nissan will be seeking out members of the general public to participate as passengers, in a series of trials through a booking application on smartphones, said Kazumasa Fujita, a manager at Nissan’s corporate strategy department.
The trial is the first concrete step in Nissan and DeNA’s joint robot taxi project, which was announced in January 2017. The cars will be more advanced than Nissan’s current semi-autonomous system known as ProPilot, which enables single lane automated driving on highways. DeNA cancelled its partnership with Japanese startup ZMP to join Nissan in the project.
Nissan said a driver will sit behind the steering wheel during the test, though the vehicles will handle the driving mostly by themselves. The test service, named Easy Ride, will last two weeks, the companies said in a joint statement.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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.