Electric cars in the MENA region ?
According to Wikipedia, Tesla, Inc. (formerly named Tesla Motors) is an American automaker, energy storage company, and solar panel manufacturer based in Palo Alto, California. The company was initially founded in 2003 by Martin Eberhard and Marc Tarpenning, although the company also considers Elon Musk, JB Straubel, and Ian Wright amongst its co-founders. With Tesla to market its electric cars in the MENA region, the reactions did not take time to come out into the open as per the proposed articles of the local media.
In the current conjecture, SME Advisor Middle East, a consulting firm aimed at business owners and senior executives across the GCC came up with an article on Tesla’s ambitious promotional campaign in the Gulf reproduced here.
Elon Musk’s announcement officially introducing Tesla’s zero-emission e-car Models S and X to Dubai is all the rage this week.
But why all the hoopla? The Tesla is by no means an easy buy at an estimated price tag of AED 275,000 for the sedan version and AED 344,000 for the SUV. But this is the UAE. Looks matter, and so does 0 to 60. This is where people can drive and own vehicles that are considered a dream elsewhere. Truth be told, the Tesla is probably just going to be another expensive car on UAE roads.
Sustainability has been the UAE Government’s favourite buzzword for a few years now. In 2015, the government linked domestic petrol and diesel prices to the global market; removing subsidies that had cost US$1bn a year over the last decade. Besides the positive fiscal impact, the move was part of a wider realignment of the energy policy geared to minimising the UAE’s carbon footprint. Just last month, the Dubai Supreme Council of Energy (DSCE), the Dubai Electricity and Water Authority (DEWA) and the Roads and Transport Authority (RTA) announced new targets to cut down carbon emissions by increasing the green mobility share; aiming for one in every ten cars on Dubai roads to be either a hybrid or fully electric. A major UAE bank has just announced a special loan to allow residents to buy and drive electric and hybrid cars of their choice. And the Dubai Taxi Corporation (DTC) has just ordered 200 Tesla e-cars for its fleet.
Is the trend evident yet?
The shift to sustainability is happening now, and not a moment too soon. The transition from being a petro-economy to one based on a mix of predominantly clean energy sources won’t happen overnight; but it is happening. Implications will be far-reaching – affecting purchase choices, carmakers, energy companies, insurers, health care, government funding, and more. Value shifts as a new ecosystem of mobility emerges.
Which is why Musk’s announcement has echoed so loudly. The Tesla founder didn’t just announce the introduction of his cars in the UAE; he promised to aid the setting up of a whole e-car ecosystem. Pledging tens of millions of dollars in the UAE for charging, service and support infrastructure is not just a huge challenge; it could perhaps be the catalyst the country needs to start buying electric. With Tesla, sustainable personal transport has finally arrived.
The UAE has had a long-standing love affair with cars, and has been a lot slower in introducing electric vehicles on its roads. The good news is that it is still ahead of other countries in the region. Fossil fuel is only going to get scarcer, and prices are only going to go higher. The introduction of the e-car might not spark a tsunami transition in buying habits. But what it will begin is a rising tide of sorts that will expedite the UAE Government’s efforts to shift its dependence on oil – to clean, renewable energy sources. And will Tesla be the car that drives us into a sustainable future? If Elon Musk has his way, it will.
Tesla’s drive was also reviewed by AMEinfo and the following article was posted on 16 February 2017.
3 reasons why MENA is not ready for Tesla
- Large parts of MENA region are still struggling with basics
- Many countries in region don’t have the necessary infrastructure
- High cost of such vehicles may be another hindrance
Tesla, the manufacturer of autonomous electric vehicles, made headlines this week when it announced a market debut for the Middle East region, through Dubai.
And buying has already started. The emirate’s Roads and Transport Authority (RTA) signed on Monday an agreement on the sidelines of the World Government Summit to buy 200 Tesla vehicles. The vehicles would be fitted with multiple autonomous driving technologies.
Tesla also started accepting online orders through its website, with initial deliveries expected this summer.
The company also opened a pop-up store in Dubai Mall, the world’s largest shopping centre, allowing potential buyers to experience Tesla and learn about benefits of ownership. In addition to its Dubai activities, the automaker plans to open a store and a service centre in Abu Dhabi by 2018.
These moves seem to signal the major advent of autonomous vehicles in the UAE and the wider MENA region, but are we really ready?
No room for growth
Tesla’s announced activities are currently limited to the emirate of Dubai and near-future plans include the UAE as a whole, but it has not yet announced any plans for other countries in Middle East, or the larger MENA region. While Musk said there are plans to expand to other Gulf countries, nothing has been officially announced.
However, the UAE is relatively small market in size compared with the larger MENA region. Apart from a few neighbouring countries still benefitting from oil dollars, many other nations in the MENA region is still struggling with basics; either picking up the pieces from political uprisings, or embroiled in civil war and terror threats, making them not the greatest markets in terms of opportunity.
This could well be the reason why Musk kept the MENA region as a stop after China, as the latter was more of a priority.
(Tesla targets Middle East drive with Dubai debut)
Tesla also brought its sophisticated Supercharger and Destination charging network to the emirate. It opened two Supercharging locations at The Last Exit in Jebel Ali and in Masdar City, allowing drivers to recharge their vehicles in minutes rather than hours. UAE is already home to a number of Tesla’s Destination chargers, which are available at 26 locations across the UAE, including hotels and shopping malls.
By the end of the year, Tesla will open five additional Supercharger locations, enabling long distance travel across every route into and out of the country.
As we have the UAE’s sophisticated infrastructure, including smooth roads and services needed for maintaining and operating the charging centres, such luxuries don’t exist in other MENA countries.
Some countries are just now looking to overhaul their infrastructure, such as Kuwait which announced projects worth $15.6 billion for financial year 2017-2018, or Lebanon, which just received $200 million from the World Bank Group for road repairs.
Other countries also suffer from deadly infrastructural roadblocks that cannot be solved through a few projects, but rather need a comprehensive urban development plan and time for execution, such as Egypt, with its traffic clogs and overpopulation.
Tesla made its regional debut with two flagship cars, Model S and Model X, priced at AED287,000 and AED356,700 for the basic models, excluding taxes and government fees, according to Tesla’s website.
While the UAE has one of the highest GDPs in the Arab world, estimated by the World Bank at $370bn in 2015, other countries lag behind as they struggle with political and economic instability.
For instance, Lebanon’s GDP stands at $47bn, Jordan’s is at $37bn and in North Africa, there are higher GDPs but much larger populations, such as Algeria, whose GDP stands at $166bn, but the country had a population of 39m, as of 2013.
However, Tesla seems to be aware of this factor, which is why its plans for the foreseeable future are limited to the UAE.
Further reading as proposed by AMEinfo.