Yusuf Al-Arabi (ABU DHABI)
The UAE’s Electric Vehicle (EV) market is growing, according to a research report published by MarkNtel Advisors, a global market research company, with a notable presence in key markets such as the USA, Europe, Southeast Asia, the UK, the GCC states, and Asia.
The report attributes the growth of the EV market in the UAE to the government’s increasing investments in installing charging infrastructure across the country to support the shift towards sustainable transportation. This goes in line with the UAE’s goals to reduce carbon emissions by increasing reliance on electric vehicles.
Infrastructure for electric vehicle charging, which includes both public and private charging stations, as well as hardware and software systems, is expected to grow at a compound annual rate of approximately 14.28% during the period from 2023 to 2028.
The report anticipates that smart city initiatives will facilitate partnerships between stakeholders from public and private sectors to develop and finance charging infrastructure. These partnerships can help reduce the financial burden on charging infrastructure providers and enable the development of a more comprehensive charging network.
Additionally, various government initiatives, such as Dubai’s Green Mobility Strategy 2030, have encouraged widespread adoption of electric vehicles, leading to increased demand for the construction of more charging stations.
For example, in 2022, Pulse, a smart mobility solutions provider based in the UAE, announced the deployment of fast electric vehicle charging stations around Abu Dhabi in frequented locations such as parks, cafes, and restaurants. The report expects that the UAE government’s significant investments in electric and hybrid vehicles, sustainable transportation, and related infrastructure by 2050, as announced in 2018, will continue to stimulate market revenue growth in the coming years.
As part of the driving factors for the electric vehicle charging infrastructure market in the UAE, the government has initiated measures to encourage electric vehicle use, develop charging infrastructure, and reduce carbon footprint, aligning with Abu Dhabi Economic Vision 2030.
The government also provides financial incentives for electric vehicle buyers, such as registration fee reductions and customs duty reductions, contributing to increased demand for charging infrastructure. The government’s initiatives, coupled with a growing focus on promoting foreign direct investment in electric vehicle manufacturing and increasing the supply of electric vehicles in the country, are expected to boost demand in the anticipated period.
The report highlights that installation and maintenance costs, especially for fast-charging stations requiring heavy electrical equipment and high-capacity power supplies, pose significant challenges in the sector.
Smart city initiatives, as outlined in the report, can provide numerous opportunities for the electric vehicle charging infrastructure market in the UAE by integrating various technologies and services to make cities more efficient and sustainable.
Among the key market trends is the integration of renewable energy into charging stations, incorporating sources such as solar and wind energy into the charging infrastructure to reduce carbon emissions and promote sustainable transportation. Given that the transportation sector is one of the largest sources of greenhouse gas emissions, government and local public encouragement of sustainable transport solutions is evident.
For instance, in 2022, the Al Masaood Group in Abu Dhabi launched a solar-powered charging solution called Solar+ for electric vehicles in the country. Moreover, the unification of renewable energies also helps reduce operational costs for charging stations in the long run, making it a preferred choice for station owners. Additionally, the UAE continues to diversify its energy mix in line with the UAE Energy Plan 2050, including 44% clean energy, 38% gas, 12% clean coal, and 6% nuclear energy.
This is expected to enhance the demand for sustainable mobility in the country, necessitating the deployment of additional green energy charging infrastructure with improved charging capabilities. Government initiatives are driving expansion in the sector during the current decade, incorporating renewable energy into charging stations as a recent market trend.
Public-private partnerships for the development and financing of charging infrastructure are also on the rise.