Peter Chippendale, Automotive Analyst
17 April 2023
While MEA has historically resisted widespread adoption of BEV brands and infrastructure, 2023 has already seen an accelerated introduction
17 April 2023
The Middle East and Africa (MEA) BEV market is growing rapidly, driven by a combination of government incentives, increasing awareness of the benefits of BEVs, and the development of charging infrastructure. The first of these, government incentives, is one of the main drivers of the BEV market. Many countries in the region, including Israel, the United Arab Emirates (UAE), and more recently Morocco, offer financial incentives to encourage the adoption of BEVs. These incentives include tax breaks, subsidies, and reduced registration fees. The Kingdom of Saudi Arabia has gone a step further to promote both BEV adoption and even production, with the kingdom’s Public Investment Fund (PIF) taking a 61% share of the California-based BEV manufacturer Lucid Motors and promising an assembly plant capable of supplying 150,000 cars a year by 2025 in the King Abdullah Economic City (KAEC). More recently (in February 2023) the new Saudi-based BEV brand ‘CEER Motors’ was unveiled, with the intention of producing 170,000 units a year in conjunction with Foxconn and BMW.
Leading the charge on the African continent, Morocco is taking great strides to improve its BEV charging infrastructure with the government having very recently created an intersectional association to push the development of electric mobility within the country, and as such, has given the go-ahead to install 2,500 new charging stations in the country before 2026. As one would expect, these charging stations are to be strategically placed in the more urbanised areas of Casablanca, Tangier, and the capital Rabat. Private charging infrastructure is also being promoted, as seen by the collaboration between Vital Auto Parts (a local automotive equipment importer and distributor) and Wallbox Chargers (a Spanish charging manufacturer) for installing and marketing charging stations within the city of Rabat by the end of 2023.
Along with its local BEV adoption plans, Morocco has also been identified as an enticing production hub for several different European brands. The new Dacia Jogger BEV will be produced in the firm’s Tangier plant from 2024 onwards. Stellantis is already making use of its Kenitra plant to produce the Citroën Ami and Opel Roxx quadricycles, with the firm benefitting from the mutually beneficial free trade agreement between the EU and Morocco.
Another factor driving the growth of the MEA BEV market is the increasing awareness of the benefits of electric cars. As people become more concerned about the environment and the impact of traditional gasoline-powered vehicles, they are increasingly turning to BEVs as a more sustainable alternative. In addition, BEVs are becoming more affordable, with the cost of batteries and other components falling over time. This is a crucial part of electric vehicle adoption in the region which continues to benefit from low fuel prices.
2023 has already seen the emergence of several alliances between established Chinese BEV manufacturers and local assembly plants or distributors. The Chinese manufacturer BYD (forecast to sell 1.7 mn BEVs globally in 2023) recently unveiled an alliance with the UAE’s Al-Futtai Electric Mobility Company to facilitate the distribution of four model offerings (both BEVs and PHEVs). As stated by the MD of the Al-Futtai Electric Mobility Co., Hasan Negriz: “The UAE EV market is expected to grow at a rate of 30 per cent annually until 2028, which represents a significant growth and market potential.” In a similar fashion, the BYD brand was launched in Jordan in March, showcasing the Dolphin, Han, Tang, and ATTO 3 BEVs.
Having always followed a far more Eurocentric vehicle selection than its neighbours, Israel can already be considered to have an established and accelerating BEV market. 2022 saw the sale of over 3.7k BYD ATTO 3 models (locally known as the Yuan Plus) in just the last quarter, while Tesla saw sales of over 6k units throughout the year. Part of Israel’s BEV success is the competitive nature of the vehicle market ensuring prices are kept comparable between brands, and the comparatively high fuel prices (gasoline is currently US$1.96 per litre) making a more convincing case for BEV adoption.
A more surprising alliance has been announced in Iran, renowned for its insular vehicle production owing to international sanctions, where the Chinese automotive company Skywell has formed a joint venture with the Navin Mahan Electric Vehicle Company (Nebka) to spearhead the development of the Skywell ET5 electric car within Iran, along with the associated charging infrastructure. The low fuel price in Iran (gasoline is currently priced below US$0.06 per litre) acts as an immediate headwind to the widespread adoption of BEVs within the country. However, with an annual PV (Personal Vehicle) sales forecast of over one million units for 2023, this is evidently a tantalising enough growth prospect for Skywell while other BEV providers are restrained from selling in this market.
Despite these positive trends, there are challenges to the growth of the MEA BEV market. One of the biggest is the lack of charging infrastructure. While some countries are investing in this area, others are lagging, which can make it difficult for BEV owners to find places to charge their vehicles. In addition, BEVs still face cultural and societal barriers in the region, with some people viewing them as less prestigious or less reliable than traditional ICE vehicles. The obvious elephant in the room is the largest car market on the continent, South Africa, which is yet to embrace the BEV revolution despite growing calls for action from the leading vehicle manufacturers in the country. However, with increasing power outages (known locally as “loadshedding”), there isn’t much confidence in the country’s electricity network being able to facilitate the operation, let alone production, of a growing BEV population.
These challenges are just a few of the many headwinds to the widespread adoption of BEVs in both the Middle East and Africa, and as such it is important to treat some of the more bullish BEV forecasts with caution. At LMC Automotive, we remain sceptical about some of the publicly announced production and sales aspirations for this region, especially when considering the macroeconomic factors currently affecting BEV adoption in the more established markets of Europe, North America, and Asia.
Despite these challenges, the MEA BEV market is poised for significant growth in the coming years. With government incentives, increasing awareness, and the development of charging infrastructure, BEVs are becoming an increasingly attractive option for consumers in the region. As the technology continues to improve and prices continue to fall, the MEA BEV market should continue to grow well in the years ahead.