Dubai and India accelerate sustainable mobility ahead of COP28
Dubai is gearing up to host the 2023 UN Climate Change Conference on November 30. The 28th meeting of the Conference of the Parties (COP28), which will convene from November 30 to December 12 in Dubai, will bring together policymakers and key stakeholders from across the globe to discuss and develop policies aimed at addressing global temperature rises and adapting to the adverse effects of climate change.
Addressing climate change stands as a critical concern for the UN, and within the climate change dialogue the transportation sector has emerged as a top priority for action. The sector currently contributes approximately 23% of the world’s man-made CO2 emissions, and there is a widespread agreement to reduce transport-induced CO2 emissions by a minimum of 50% by 2050. Public-private interventions and the widespread adoption of electric modes of mobility play a crucial role in achieving significant reductions in CO2 emissions.
Electric vehicles (EVs) offer a fuel-efficient alternative for the transportation sector, enabling substantial cuts in CO2 emissions. Sergey Paltsev, Deputy Director of the MIT Joint Programme on the Science and Policy of Global Change, says, “Electric vehicles are clearly a lower-emission option than cars with internal combustion engines. Over the course of their driving lifetimes, EVs will create fewer carbon emissions than gasoline-burning cars under nearly any conditions”.
Credit - Dubai Electricity and Water Authority (DEWA)
EV market in the UAE
There is a global shift towards the adoption of electric vehicles (EVs) as consumers become increasingly conscious of choosing transportation powered by cleaner energy. It is undeniable that EVs represent the future of automobiles. According to McKinsey & Company, the EV market is projected to reach a value between $300 and $500 billion within the next 10 years.
Although still in its early stages, the EV market in the UAE is projected to experience an annual growth rate of 30% between 2022-2028, as stated in the global electric mobility readiness index compiled by US-based management consultant firm, Arthur D Little. The report also identifies the United Arab Emirates (UAE) as one of the world’s top 10 countries that are well-prepared for EV adoption. This evaluation considered several factors, including macroeconomic conditions, competitive landscape, customer readiness, public charging infrastructure, and the total cost of ownership and regulation.
Within the UAE, approximately 52% of residents are looking to switch to hybrid or EVs due to the escalating fuel prices. The Minister of Energy and Infrastructure has observed a rapid increase in EV sales, with EVs now accounting for more than 1% of the overall car market in the country. However, around 25% of consumers are waiting for more EV options to be introduced.
In response to consumer demand, Al-Futtaim, the Dubai-headquartered progressive regional family business and the UAE’s first ever e-mobility focused dealer, is ready to offer a diverse range of affordable and premium electric vehicles.
Hasan Nergiz, Managing Director, Al-Futtaim Electric Mobility, stated that the company aims to democratise the local EV market. Al-Futtaim has partnered with major EV brands such as BYD and Polestar. The recently launched BYD ATTO3 C-SUV, for example, is the most affordable electric SUV in the segment.
Furthermore, the company provides financing models to consumers to further encourage sales. Nergiz stated that the “guaranteed future value” is their most popular finance offering. This model allows the consumer an option to buy back or repurchase the car at an agreed-upon-price at the end of three years, or to make the final payment for the car at that time.
Under its Net Zero 2050 Strategic Initiative, the UAE is expanding its efforts to move to clean and sustainable technologies. The initiative calls for an investment of $163 billion in clean and renewable sources over the next three decades. EVs are expected to play a critical role in this programme, as the transportation sector is a major contributor to carbon emissions.
“Governments in the Middle East are increasingly receptive to EV technology on the roads with the UAE ranking high in readiness for electric mobility,” said Joseph Salem, Partner, and Travel and Transportation Practice Lead at Arthur D Little - Middle East.
In line with this, the Dubai Electricity and Water Authority (DEWA) has launched an EV Green Charger Initiative, making EVs accessible to the public. Currently, the UAE boasts 325 charging stations, making it one of the countries with the best charging station-to-vehicle ratios globally. In January 2023, a partnership between Regency and EvGateway was announced, with a goal of deploying 10,000 EV charging stations throughout the UAE by 2030.
Credit: Dubai Media Office
Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure emphasised that the ministry is conducting research on new legislation regarding EV charging stations in the UAE. The objective is to reduce charging time, increase efficiency, and maintain reasonable pricing. “We are installing more [charging stations] and encouraging the private sector and the gasoline and diesel distribution companies to also enter into this business and start helping in the infrastructure and the regulation part,” he said.
The DEWA and the Road Transport Authority (RTA) are working on incentives such as free parking, toll exemptions, and reduced registration fees. Their long-term goal is to make public transport emission-free by 2050. In February 2023, the RTA announced its endorsement of making all Dubai taxis electric, hybrid, or hydrogen-powered within the next four years.
The India angle
As the global automotive industry undergoes a paradigm shift, India is also investing in electric mobility. Last year, India witnessed a significant milestone with over 1 million EVs sold, marking a remarkable 206% increase compared to the previous year.
The Government of India has set an ambitious target for the country to achieve 100% electric vehicle (EV) adoption by 2030. According to studies conducted by the Centre for Energy Finance (CEEW) and the India Energy Storage Alliance (IESA), the EV market in India presents a significant opportunity, projected to reach a value of $206 billion by 2030, with an expected Compound Annual Growth Rate (CAGR) of 49% during the 2022-2030 period.
In 2021, the Indian EV industry attracted $6 billion in investment and is increasingly attractive to private equity and venture capital investors. Furthermore, 100% foreign direct investment (FDI) is allowed in this sector under the automatic route.
Dubai has made its mark in the Indian EV sector through Al-Futtaim Automotive, one of the main vehicle distributors in the UAE. Al-Futtaim Automotive invested $15 million in River, a Bengaluru-based electric startup. Paul Willis, President of Al-Futtaim Automotive, praised River's vision and commitment to in-house product development, expressing confidence in their success both in India and internationally.
Considering that the majority of the Indian population owns two-wheelers rather than cars, the adoption of EVs in India will be primarily led by two-wheelers. The Indian two-wheeler vehicle market is projected to grow from $16.01 billion in 2022 to $26.64 billion by 2028, according to ResearchAndMarkets.com.
River, founded in March 2021 by Aravind Mani and Vipin George, aims to stand out with its innovative technology and design of electric scooters. The company has set a target to sell 5,000 scooters per month by the end of 2024. Aravind Mani, Co-founder, and CEO of River expressed the company's determination to build a billion-dollar business after two years of quiet work. The funding received will strengthen River's manufacturing and distribution networks, with plans for an August roll-out in India.
Another Dubai-based EV company, One-Moto, has also entered the Indian market with a focus on electrifying the last mile through its electric delivery bikes. One-Moto, founded by Adam Ridgeway and launched in December 2019, has expanded to five continents, and is now operating in India as well.
The road ahead
Both Dubai and India are forging ahead in the EV landscape, demonstrating their commitment to sustainable mobility and the reduction of carbon emissions. Dubai's initiatives for EV adoption and the widespread establishment of charging infrastructure signifies its dedication towards achieving a sustainable future. Similarly, India's ambitious goal of becoming a 100% electric-vehicle nation by 2030 demonstrates its preparedness to embrace the e-mobility revolution. These aspirations present unique opportunities for bilateral cooperation and investment.
Dubai, known for its forward-thinking approach and favourable business environment, offers ample opportunities for Indian EV companies to expand their operations. Simultaneously, the massive Indian EV market presents an enticing prospect for investors from Dubai, seeking to capitalise on India's rapid EV growth. Such cross-border investments not only facilitate technological exchange but also stimulate the regional EV ecosystem, accelerating the global transition towards sustainable transportation.
The journey towards sustainable mobility calls for concerted international efforts, and the collaboration between Dubai and India is a shining example of this.
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