Electric Vehicle Demand on the Rise
Autodata indicates in its semi-annual report that the demand for electric vehicles is increasing.
The report highlights the rising demand for electric vehicles, residual values, key trends in consumer behavior, the shift in consumer purchase journeys, and the growing influence of Chinese brands in the region.
The UAE and Saudi Arabia are witnessing a growing demand for electric vehicles, with government initiatives and efforts to expand the infrastructure dedicated to these models. The UAE, by 2024, ranked eighth globally in the Electric Vehicle Market Readiness Index, with approximately 325 charging stations.
As the focus on sustainability increases, 79% of consumers in the UAE and 72% of consumers in Saudi Arabia are considering purchasing an electric vehicle next time. The UAE’s electric vehicle market share is expected to increase significantly, exceeding 15% by 2030. In fact, Dubai is home to 25,929 electric vehicles while Abu Dhabi’s electric vehicle fleet is set to expand to 2,441 models by Q4 2024.
Some Middle Eastern countries, such as the UAE and Saudi Arabia, have set ambitious targets to facilitate the adoption and choice of electric vehicles. For example, the UAE government aims to expand its electric vehicle charging infrastructure to 10,000 stations by 2030, with a goal of achieving 50% electric and hybrid vehicles by 2050. This sustainable goal is also reflected in Dubai, where the emirate aims to convert its taxi fleet to all-electric, including hybrid, electric and hydrogen models by 2027. In contrast, the Public Investment Fund of Saudi Arabia, in line with Vision 2030, aims to deploy 5,000 fast-charging stations by 2030.
This shift towards sustainable transportation comes as a result of the increase in electric vehicle sales in many markets, such as Dubi Cars, which recorded a 45% increase in sales between 2022 and 2023, with an expected increase of 13% in 2024.
According to Autodata’s latest research on residual values, used electric and hybrid vehicles are outperforming petrol and diesel vehicles in the UAE. The report reveals a 250% increase in electric and hybrid models over the past five years, as interest and investment in electric vehicles grows with many brands launching a range of models to meet this demand.
SUVs still hold their value to a large extent compared to sedans. In contrast, luxury and premium vehicles, despite their price points, have seen their residual values decline after a few years due to their higher maintenance costs.
Autodata’s report indicates a significant increase in demand for GCC-spec vehicles, with 86% of Vehicle Report users identifying themselves as buyers primarily interested in models between 2015 and 2020. Toyota and Nissan continue to dominate the market, capturing 24.8% and 17.1% of the market share respectively in Q1 2024. Additionally, drivers are increasingly opting for vehicle leasing services, with 83% of them willing to consider leasing. This is due to the flexibility that leasing options offer drivers, including free services such as free insurance, service and maintenance, flexibility in leasing duration or mileage, and more.
Consumers in the UAE and Saudi Arabia are increasingly choosing to start their car buying journey digitally, highlighting a clear preference for online research before visiting a store. This integrated approach underscores the importance of automotive market players providing a seamless transition between digital and physical channels.
Consultancy Middle East conducted a consumer survey, and 83% of respondents prefer to start their purchase journey via dealer websites, while 85% still prefer in-store negotiations. This trend indicates the importance of seamless integration between marketplace platforms and physical showrooms to ensure seamless customer experiences.
Platforms like Dubizzle and Dubcars dominate the digital landscape with a combined market share of 73% due to their extensive inventory and integrated and user-friendly interfaces. In contrast, other players in the market hold varying shares such as 13% for YallaMotor and 11% for OpenSouq. The remaining 3% is shared by Cars24 and other smaller platforms that also offer tailored offers and services such as inspections, financing, and more.
Chinese brands have quickly gained a strong foothold in the UAE’s automotive sector. Autodata highlights that demand for Chinese cars increased by 150% in June 2024 compared to 2023 across markets such as Dubicars. Consumers are increasingly choosing these brands over American, Chinese and European options, based on a number of key factors including cost and advanced technology budget. For example, the average price of a new Chinese hatchback is 34.5% lower than a comparable American model.
Chinese brands continue to establish their presence in the region, thanks to their diverse product offerings, high quality and the integration of innovative technologies. According to DubiCars, the market share of Chinese brands increased from 0.58% in 2022 to 2.68% in 2023. Leading brands in the UAE in particular include Jetour, Changan, BYD (Build Your Dreams), JAC and Chery.
“Autodata Middle East is at the forefront of the region’s dynamic and rapidly changing used car market. Our commitment to transparency and trust is reflected in the innovative tools we offer, such as the Vehicle Report platform, which provides detailed information about a vehicle’s past, such as accident history, previous ownership and market valuations,” said Sebastian Fuchs, General Manager, Autodata Middle East.
“Today, we are pleased to announce the launch of our new DealRevs tool for businesses, enabling used car companies, dealers and stakeholders to gain real-time data to inform their decision-making and accurately assess price points when buying and selling vehicles. Our services are valuable to consumers and businesses alike, helping them navigate the complexities of the used car market.”
Conclusion:
The demand for electric vehicles is increasing in the GCC region, driven by government initiatives and consumer preferences. Chinese brands are gaining traction in the market, with many consumers opting for these brands due to their competitive pricing and advanced technology.
Frequently Asked Questions:
Q: What is the current demand for electric vehicles in the GCC region?
A: The demand for electric vehicles is increasing, with 79% of consumers in the UAE and 72% of consumers in Saudi Arabia considering purchasing an electric vehicle next time.
Q: What are the key trends in consumer behavior?
A: Consumers are increasingly choosing to start their car buying journey digitally, with 83% of respondents preferring to start their purchase journey via dealer websites.
Q: What is the market share of Chinese brands in the UAE?
A: The market share of Chinese brands increased from 0.58% in 2022 to 2.68% in 2023.
Q: What are the benefits of leasing a vehicle?
A: Leasing offers flexibility in leasing duration or mileage, and free services such as insurance, service and maintenance.