190719 electric dream
Image Credit: Supplied

Dubai: Close the price gap. Or if that’s not possible just yet, at least try to reduce the price difference.

For any carmaker wanting to sell electric cars or hybrids, this offers the best route to win over buyers from choosing a standard vehicle. Toyota has done just that with the launch of the hybrid version of its eternally popular Corolla. It sure does seem as if it has hit the sweet spot on the pricing.

While an all-fuel powered Corolla sells for Dh71,900 and upwards, the hybrid has been tagged at Dh83,900. This is as close as it gets, for now, between the two alternate versions of driving.

(Let’s not get into electric for now — there’s nothing in the market below Dh100,000 for an all-electric model, which stops it from being a mass-market option.)

But a Dh12,000 price difference could certainly have more people consider the Corolla hybrid.

Toyota and its local dealership, Al-Futtaim Motors, are promising a fuel economy of 27.6 kilometres to a litre for the hybrid, and for buyers who do consider such details, it matters. The Corolla itself requires little introduction — an estimated 250,000 have been bought over the years in the UAE, and the chances are that a lot of those are still running. So, convincing a prospective buyer is, in theory, far easier than it would have been for any other brand or make.

190719 dubai showroom
A woman checks out Renault’s electric Zoe vehicle at a showroom in Dubai. Image Credit: Virendra Saklani/Gulf News

“Hybrid versions have been available in the UAE for some time — but they haven’t caught the imagination of car owners and there was the pricing factor too,” said a source with one of the leading dealerships in town. “But if the price threshold comes down for hybrids, they could become more relevant to buyers. And once awareness increases, demand too will increase.”

That’s the crux of it — hybrids and, going forward, electric cars need access to a wider user base and not just be reliant on sales to only a niche audience made up of the environmentally-conscious or those who aspire to the “cool” factor by driving a Tesla or any other electric make.

Plugging into a new generation of buyers

Marin Bozev, who is into music production, represents a new kind of buyer UAE dealerships should go after. He has just picked up a Camry hybrid for Dh133,500 after trading in his three-year old fuel-run model, also a Camry. He did not make the switch just because he felt it was the done thing to do. His reasons were based on more practical considerations. (A standard Camry retails for Dh83,000 and over.)

“With my old Camry I was fuelling every three days — now with the hybrid, this happens every six or seven days,” he said. “I drive around 35,000 kilometres a year, and the fuel consumption of the hybrid is about 60 per cent less the old one.

“I would be saving half of my money on petrol, and when you calculate, you will find that after a few years, this car will have paid for itself based on the petrol savings.”

If UAE car dealers can convince more such buyers about a compelling hybrid-driven future, it would go some way towards setting the stage for the electric as well.

Creating a viable all-electric future

Carmakers and dealers are convinced that going all out on electric alone may not pay dividends, because sticker prices are still steep, and many potential buyers will need far more convincing about their “range anxiety”. Plus, as Michel Ayat, CEO of AWR Automotive, says it: “Buyers will need to see charging stations being available all over the place. But just as important, charging times when on the road will need to come down future. You can’t spend 20-25 minutes at a charging station — that needs to come down quite a bit.”

Currently, DEWA (Dubai Electricity and Water Authority) has 200 electric vehicle charging stations in the emirate, under its “green charger” programme. The Roads and Transport Authority, meanwhile, targets having 60-70 per cent of its fleet on electric by 2025-26, while the stretch target for Dubai is to have 25 per cent of its vehicle population operating on zero emissions.

Doable? On the fleet side, Dubai shouldn’t have too much of an issue ticking the boxes. But the real surge will come only when electric models gain traction with more cost-conscious buyers.

Luxury is where electric car sales can get a real spark

In the not too distant future, it will not be Tesla alone garnering all the attention to itself in the electric car sweepstakes. Porsche, for one, will be debuting its first all-electric, the Taycan, later this year.

“We are taking a step approach that includes developing infrastructure readiness with accessible home and destination charging options,” said Manfred Braunl, CEO for the regional operations. And “rolling out educational campaigns that inform prospective customers about ownership of an electric Porsche sports car in the Middle East.”

Porsche is one manufacturer which prefers to keep both the hybrid and electric options running simultaneously. “Porsche’s philosophy is to offer customers the full model range ... across the globe as far as national laws and homologation rules allow.”

BMW brings forward its electric road map

Carmakers aren’t waiting around to build their electric models. The BMW Group has brought forward its plans to have 25 “electrified” models by 2023 — that’s two years ahead of the earlier plan. Clearly, no one wants to be seen stretching timelines and then have others come in and fill in the demand. (More than half of the BMW line up will be fully electric.)

“By 2021, we will have doubled our sales of electrified vehicles compared with 2019,” said Harald Krüger, who recently stepped down as chairman at BMW AG. “We expect to see a steep growth curve towards 2025: Sales of our electrified vehicles should increase by an average of 30 per cent every year.”

But convincing UAE car owners — the vast majority of them — will require manufacturers to come up with models that don’t make too much of a dent in owners’ budgets. Just repeating the message that electric is good for the environment will not be enough. Buyers will need to see something much more tangible in terms of promised benefits.

And that extends to even what these models could go for in the second-hand market. “We expect depreciation rates to behave similarly to other cars ... but this remains to be seen as more data comes in,” said Saygin Yalcin, CEO of Sellanycar.com and Buyanycar.com, the online marketplace. “So far, there is no hype around it.

“While electric car sales are growing since 2017, they still only make up less than 1 per cent of the local market. But it is too early to tell what will happen next.”

That’s the big “if” carmakers and their dealers need to deal with. Closing the price gap would be a good place to begin.