When cars and fuel are as cheap as they are in Gulf countries, why would you ever consider buying an over-priced electric car (or electric vehicle/EV)? With the same $70,000 you’d splurge on a Tesla, you could pamper yourself with a luxurious Cadillac or an Audi.
This is where the real question comes: How can a country like the UAE encourage EV adoption?
Practicality versus environmental responsibility
Pro-EV groups and individuals will all tell you the same thing: EVs are better for the environment. In reality, this has been proven true time and time again, by the likes of the Union of Concerned Scientists.
Electric car manufacturers, however, have realized that this sales pitch doesn’t do it for customers. As we can have seen repeatedly, customers almost always resort to the cheaper and more convenient option when it comes to buying a product. Eating organic might be healthier, but not everyone is willing to go out of their way to find an organic market, or to drop a bundle of cash on a few apples.
Nissan saw this first-hand when their video ad for the Leaf flopped.
“In a 2010 commercial for the Nissan Leaf, a polar bear flees the melting Arctic and travels south to civilization,” Clean Technica said. “He discovers roads and cities and growls at a couple of trucks. Eventually, he comes upon a Nissan Leaf parked in the driveway of suburban home. Overcome with gratitude, he hugs the owner.”
The ad failed because it missed the reason customers buy cars. We buy cars to conveniently get from one place to another, to enjoy a comfortable ride. We want to pay as little for fuel and parts. Sometimes, we buy cars for the luxurious factor. Almost never do we buy a car to save the planet. The mere fact that we drive internal combustion vehicles is enough proof of our preference for convenience over sustainability.
Obviously, the number of environmentally conscious consumers is rising, especially with the generation of millennials. According to a 2016 survey conducted by Nissan in Europe, more than three-quarters of millennials (76%) consider driving eco-friendly cars as the best choice to make their lives more environmentally friendly.
The cheap oil problem
When you are as oil-rich as the GCC countries, the price of a litre of petrol is the least of your concerns. The fuel money you’d spend on topping up your Hummer in Kuwait would barely fill half a Renault hatchback in Norway, where petrol prices are astronomical.
Cars are also cheaper here than in other places in the world, and they depreciate faster due to high demand and excessive spending habits. This means you can nab a luxurious SUV for half is original price in just a few years.
Why then would you even consider buying something like a pricey Tesla in a country like the UAE? Ziad Nassar, the co-creator of blockchain-enabled travel savings club Gozo, believes that this pricing issue is still a problem.
“Consumers are price sensitive,” he told AMEinfo. “Asking them to pay an extra 30,000 dirhams to save money in the future is an obstacle for many.”
There’s also the hassle of finding a recharge station to consider when you make any trip, which Nassar mentions as well. Ride-sharing company Careem also pitched in on the conversation, also pointing out the lack of enough charging stations.
Bassel Al Nahlaoui, Managing Director of Careem Gulf, also told AMEinfo that there aren’t enough incentives to motivate buyers just yet, while also singling out the “lack of support at the government level to incentivize the private sector and real estate developers to add charging stations.”
To add to these comments, while mileages are improving, they still are not too optimal.
In European countries, EVs have been seeing a sort of renaissance. EV data collection and analysis firm EV Volumes reported a 42% increase in sales in H1 2018 compared to H1 2017. While it’s true that sustainability is a major topic on Europeans’ minds, it’s the prospect of not having to pay so much on petrol and diesel that’s fueling these sales.
This concern does not exist with the average citizen striving to make ends meet in the GCC, however, nor with the more well off local.
So what can be done?
At the moment, it would seem that the responsibility falls on both the private and public sector to stimulate customer interest.
“Tax or loan incentives for EVs, home chargers or even offering free charging credit would incentivise potential auto buyers toward buying an all-electric car,” Nassar said.
Similarly, Careem’s Al Nahlaoui believes that there is a need for more “aggressive incentives” and for charging station infrastructure to become more widespread.
On the other hand, it falls to EV manufacturers to take a different approach in marketing their vehicles: focus more on convenience (and in some instances luxury) over a pure sustainability approach.
Newer technology should also allow for EVs to become much more affordable, to cater to the consumer with less to spend.
“There are about 4,000 hybrid and electric vehicles on the road now in Dubai, including fewer than 1,000 fully electric vehicles,” Faisal Rashid, a director at the Dubai Supreme Council of Energy, told Bloomberg.
If the UAE is to hit its target of 10% of vehicles on the road being electric by 2030, it will need to push forward with these incentives and strategies.