The GCC countries’ overarching economic diversification plans have helped cushion the blow of oil price fluctuations on their economies. Reducing the dependency of Arab countries on oil revenues has long been thought as key to a sustainable economy; in light of weak oil market conditions, their economic resilience has proven to be the fundamental result of such a strategic approach.
A sustainable economy focuses on a wide range of profitable sectors through creation of wealth, generation of job opportunities, and development of new knowledge and innovative technologies. Sustainable automotive technology is one key component of this economic framework. The interest in this sector is high especially amid intensified environmental sustainability programs in the region. The typical range for environment-friendly electric vehicles (EVs) is from 120 to 400 kilometers, depending on battery capacity and type of vehicle. Using EVs is projected to result in substantial oil savings worldwide, while EV owners are expected to significantly reduce their fuel costs. In the US alone, nearly 1.5 million barrels of oil per day will be saved by 2035, thanks to these vehicles . According to a report released by research firm Transport Research Laboratory, the use of electric and hybrid modes of transportation in the GCC is rising. GCC governments are moving towards providing green public transportation solutions, while some businesses are starting to operate on EVs.
This trend is more evident in the UAE where, as the report points out, initiatives towards such end are increasing. Some manufacturers are now eyeing the introduction of hybrid cars or EVs to the UAE market.
Dubai has already installed an initial 100 charging stations for EVs as part of the Dubai Electricity and Water Authority’s (Dewa) Electric Vehicle Initiative launched in 2014 to promote sustainable transportation and reduce carbon and greenhouse gas emissions. Dewa’s charging stations are categorized into three types. Fast Charge Points provide an 80 per cent charge within 20 to 45 minutes. Most of these will be installed at petrol stations. Public Charge Points provide a full charge in two to four hours, while Home Charge Points fully charge vehicles in over six to eight hours. The charging period depends on the type of car and battery capacity. The utility company is responsible for installing and managing these infrastructures in the emirate. This initiative is especially crucial given that, per the 2015 UAE State Energy report, 22 per cent of Dubai’s carbon emissions in 2010 could be accredited to the transportation industry .
Financial and social incentives such as utility bill discounts, dedicated parking spaces in malls, free Salik, subsidized rates on car purchases, and customs duty reductions are also being considered to encourage people to use these eco-friendly vehicles. According to Dubai’s Roads and Transport Authority (RTA), Dubai already has around 200 registered EVs, including around 50 light passenger vehicles, apart from electric-powered construction and commercial vehicles as well as buses . While it is gaining popularity, the EV market still faces many challenges in the GCC. For one, batteries, if extensively used for air conditioning, can drain easily during summer months. Increasing its market share also poses another challenge. Regardless, the concept of recharging vehicles, combined with other initiatives, could play a prominent role in the GCC’s move towards becoming smart, connected, sustainable, and less dependent on oil.