UAE demand for hybrid and electric cars grows as petrol prices rise

It can cost as little as Dh8 to charge an electric car, but purchase prices remain much higher than petrol options

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A growing number of UAE motorists are switching to hybrid and electric cars to cut costs amid rising petrol prices, experts say.

The cost of petrol in the Emirates increased by 12 per cent in July, and now stands at more than Dh4.50 a litre.

Vehicle manufacturers and dealerships have recorded 'stronger than ever" demand for an alternative to petrol-based cars.

Hybrid cars use two sources of power: petrol and an electric motor. Electric vehicles have a battery and an electric motor.

Al Futtaim Automotive, a car dealership in the UAE that sells brands like Toyota, Lexus and Honda, said mounting fuel costs are key but not the only factor at play when it comes to going electric.

“Demand for electric vehicles is stronger than it has ever been,” said Vincent Wijnen, senior managing director at the company.

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“This can be attributed not just to the high fuel prices, which are helping to accelerate the growth, but also due to the growing customer awareness and acceptance of the technology… (and) environmental advantages.

“I believe that the demand for hybrid and electric vehicles will continue to grow in the years to come as current owners are expected to upgrade to newer hybrid and electric models while more and more people will realise the benefits of hybrid mobility.”

Hybrid and EV sales soar

Globally, there are just under 20 million passenger EVs on the road (including plug-in hybrids), representing 1.5% of the global fleet according to BloombergNEF’s Electric Vehicle Outlook 2022. Analysts have predicted that figure will double again by the end of next year.

The report also says that EV sales in the US - 5% of new car sales - have passed a critical tipping point that signals the start of mass EV adoption.

EVs and hybrids have been in-demand in many countries for several years now, but sales in the UAE have been noticeably higher since petrol prices started to increase.

A recent report, commissioned by Audi Abu Dhabi and produced by YouGov, found that 52 per cent of customers are looking to switch to hybrid/electric vehicles.

A quarter of the 1,000 people surveyed said they are waiting for more EV options to be launched before making a purchase, while 14 per cent expressed buyers' remorse after purchasing a petrol car instead of a hybrid.

Motorists have to weigh up what is typically a larger initial purchase price for electric and hybrid vehicles against long-term servings.

However, Mark Austin, general manager of Audi Abu Dhabi, said motorists can save money with electric vehicles.

“Interest in EVs has continued to grow organically over time, however increasing petrol prices has certainly accelerated the shift in consumers attitude towards EV adoption,” he said.

“When considering energy efficiency across the full lifecycle of producing, transporting and using fuel – typically referred to as ‘well to wheel’ – electric vehicles offer high efficiency and the lowest carbon emissions per mile.

“Depending on the type of car you drive, the average cost of filling a fuel tank can be upwards of Dh270 versus Dh8.25 to fully charge an EV battery with a 110 kWh charger. With EVs, owners also save on operating expenses."

Mr Wijnen said its Toyota Hybrid sales have grown consistently year-on-year since 2016, with growth of 33 per cent in 2017, 42 per cent in 2018, 147 per cent in 2019, 52 per cent in 2020 and 108 per cent in 2021.

The 2022 Toyota Corolla Hybrid starts at about Dh86,867.

The Lexus RX and ES hybrid models have also been popular in the UAE, having seen a 22 per cent increase in demand since last year. Prices start at Dh176,379.

One of the most expensive hybrid cars for sale in the UAE is the Ferrari SF90 Stradale, which costs Dh1,766,100.

Challenges for electric vehicles

The EV market in the country is still in its infancy, despite policies over the years that have made it easier to use electric vehicles, including increasing the number of charging stations, and free Salik and reserved parking in Dubai.

Many public taxis are now hybrid models, however.

Vitali Bielski, associate director of mobility at Frost and Sullivan, a growth strategy and consultancy company, said a country-wide roadmap was needed.

“The main (challenge) is the lack of GCC-wide or even county-wide EV policy or a roadmap,” he said.

“While Gulf states' governments are willing to welcome EVs, they lack a clear legislative path which would lead to more EVs on the streets.

“Most national sales companies and distributors expect some form of government incentives (monetary, non-monetary, infrastructure-related), while government bodies tend to rely on the automotive industry to drive the developments of the EV market.”

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Updated: July 12, 2022, 11:26 AM
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