Published on December 16th, 2018 | by Jose Pontes0
Electric Car Sales In Emerging EV Markets — Chapter 2: Middle East
December 16th, 2018 by Jose Pontes
After covering Africa in the first chapter of this “Emerging Markets” series, we now analyze the EV market and EV potential in the Middle East. In the next and final chapter, we will cover Latin America.
Some three million new vehicles were registered last year in the Middle East, and while long-term prospects seem good (young population, countries with high GDP) and experts saying it will grow twice as fast as more mature markets by 2030, the truth is that politics and especially oil-dependent economies could derail growth prospects in the next few years.
One fascinating aspect of this area is the automotive diversity in it. While some oil-rich Gulf countries are heavy on large, powerful SUVs due to cheap fuel, others that aren’t fortunate to have oil actually see compact sedans and crossovers growing their popularity.
In this region, Toyota/Lexus and Nissan are big, with Hyundai–Kia growing fast. The Chinese are also starting to establish themselves in several markets, with compact sedans, crossovers/SUVs, and pickup trucks rising.
And then there’s Israel.
It is a unique and fascinating market, as the general trends of other Middle Eastern countries are mixed with others coming from Europe, adding to some endogenous ones.
Compact crossovers and SUVs are heavily present (5 of the top 10 models belong to this category). Hyundai and Kia are the biggest players in Israel, together owning some 30% of the market. If you add in Toyota and Nissan, these four brands have 9 of the top 10 positions, confirming Israel’s status as a Middle Eastern market. On the other hand, there are 9 hatchbacks in the top 20, underlining the influence of hatchback-heavy European markets. The popularity of regular hybrid vehicles, like the Hyundai Ioniq (#1), Kia Niro (#5), and Toyota C-HR (#7) is something unique to Israel, making it one of the countries with the highest hybrid share (16%) in the world. With the new Toyota Corolla Hybrid arriving soon, as well as other hybrid landings, expect the hybrid share to surpass 20% in 2019.
And where do EVs get into play here?
In Africa, low-GDP countries and underdeveloped new car markets have made second-hand cars the main choice for mobility, which will make transport electrification easier once large numbers of EVs hit the used market in developed markets. In many markets of the Middle East, however, money is no problem. There, EV adoption will be made from the top down, with big, powerful EVs — like the ones of Tesla, Audi, Mercedes, and Jaguar — will be needed to change mindsets and break the mold, bringing in a more EV-friendly environment.
Another crucial aspect is infrastructure. Most markets still lack this important stepping stone, making most EVs urban/regional cars, unable to do cross-country trips.
Of course, Tesla in Jordan and the UAE are the exceptions. The official presence of the brand came with Superchargers in the most popular areas. Jordan now has 4 Superchargers and another on the way, while the UAE has 3 working and another 4 said to start soon.
So, who are the EV pioneers in the Middle East?
Israel — With the first EVs landing in 2011, it is the oldest plug-in electric vehicle (PEV) market in the region and was one of the first where EVs made an impact (it reached 0.4% in 2012). That was largely based on the Renault Fluence ZE’s success, a model that was promoted by the Better Place project. But then in 2013, the company went bankrupt and the local EV market went dormant, until 2017, when the market woke up again. EV sales reached into the hundreds in 2017, but it was in 2018 that things really heated up, with the market crossing 1% PEV share via more than 2,000 registrations.
Although this is good news, one should notice that around 95% of the market is made up of PHEVs, so the growth of the plug-in market is more a consequence of the current hybrid vehicle exponential growth than anything else. The current best selling plug-ins (BMW 530e, Mercedes GLC350e, Volvo XC60 PHEV, Mitsubishi Outlander PHEV…) all come from makers that do not have conventional hybrids in their lineups, so people buy them primarily because they are “hybrid” and the “plug-in” part is just an added bonus, which makes us wonder how many of their owners do plug them in at all.
On the bright side, Jaguar and Audi have already started to advertise the I-PACE and e-tron, so next year we will have a chance to check the real Israeli demand for luxury BEVs, even though they are being sold at premium. The e-tron starts at 392,000 NIS ($105,000), while the I-PACE is even more expensive — 454,000 NIS, or $122,000! (Where did Jaguar came up with these prices?!?!)
With this said, I guess 2019 would be the right time to see Tesla joining the Israeli market … am I right, Elon? (wink, wink)
Jordan — Despite a weak charging infrastructure, for example, the capital city, Amman, has only 3 charging stations. The fact is, though, there is a small EV scene forming in this country. Besides a significant number of second-hand imported EVs, mostly Nissan LEAFs, there have been growing numbers of new PEVs registered since 2017 — first with BYD and BMW models arriving, and then with Tesla landing in the country, which pulled the nascent plug-in market into the low hundreds. The Model S and X, by the way, pulled a #1 plus #2 win over the remaining weak competition.
In 2018, hot on the heels of the Ioniq Hybrid’s success (over 600 deliveries this year), Hyundai joined the plug-in market with the Ioniq Electric, providing a more affordable offer for local buyers and some competition to the local sales champions, the Tesla S & X.
With the Chevrolet Bolt said to arrive in early 2019, Jordan is expected to slowly warm up to EVs in the coming years, possibly being one of the countries in the region where the Tesla Model 3 will make a large impact.
Oman — Another country new to plug-ins, the sales numbers are still symbolic, with both 2017 and 2018 unable to cross into three-digit numbers.
This is another market with a top-down approach to PEVs, as the best sellers are high-end plug-in hybrids (BMW i8, Mercedes GLC350e, and Porsche Panamera PHEV), where people buy them first for their performance and prestige, with the plug-in aspect of the vehicles coming in second.
Maybe things could change if Tesla landed in Oman, pulling the EV market up like it did in the neighboring UAE (which we’ll come back to in a minute).
Saudi Arabia — The largest automotive market in the region (600,000 units) has a token EV market, having crossed 100 units/year in only 2015 and 2016. Sales have been based in high-end PHEVs, and the current best sellers are the BMW i8 and Porsche Panamera PHEV, two models that excel in power and luxury, and where electric drive takes a back seat.
UAE — Along with Israel, this is the most developed PEV market in the region, not only regarding sales (close to 2,000 units have landed since 2012), but also regarding charging infrastructure, with Dubai having some 200 charging stations and Abu Dhabi around 20.
Incentives are also not forgotten, with the UAE government targeting to have 42,000 electric cars on the roads in a few years. For that purpose, in September 2017, the Dubai Electricity and Water Authority (DEWA) and the Road Transport Authority (RTA) announced incentives for electric car drivers, ranging from free public parking and charging to toll/fee exemptions and discounts on electric car registrations.
Electric buses and autonomous cars have also been tested on the roads of Dubai, with the emirate counting on driverless EVs in its 2030 Vision strategic plan.
The Tesla success is the driving force for EVs in the UAE, with the American brand being responsible for roughly half of the PEV fleet, but there are also other plug-ins doing well, like the BMW i8 and the Mercedes GLC350e. More recently, the lower end of the market also started to shake a little, with the arrival of the Renault Zoe and the Chevrolet Bolt.
Images by Steve Hanley for CleanTechnica, BYD, Steve Hanley for CleanTechnica, Better Place, Steve Hanley for CleanTechnica, Zach Shahan for CleanTechnica, Zach Shahan for CleanTechnica, Dubai Media Office, Steve Hanley for CleanTechnica