Dubai: Are car buyers in the UAE having second thoughts about buying imported electric vehicles?
In recent weeks, many secondhand dealerships in the country have been seeing significant declines in demand for such imports, with buyers potentially concerned about the higher cost of maintenance. This sentiment came to the fore after the April 16 rains and subsequent damages that vehicles sustained and the high cost of repairs.
“The rains were a wakeup call, definitely, for those interested in buying imported EVs,” said a top official with a leading dealership in the UAE. “Even before the rains, we had been warning potential buyers about the risks of buying imported EVs, whether brand new or used. This is not just because we want buyers only to buy through official dealers.
“The main reason is that these imported EVs are not built for use in the specific conditions of the UAE and Gulf markets. And no one could have foreseen the cost of repairs after the April flooding.”
This is what others in the auto industry are saying. A lot of the independent garages are just not equipped to handle the complex repair works required on imported EVs.
“These are mobile ‘super-computers’ with 400V or 800V high-voltage batteries,” said the dealer. “And if garages and mechanics are not fully trained to handle complex repairs, it adds to the costs.
"Even petrol engine cars these days are high on tech - but they are no match to what EVs carry onboard. Cars sold through official dealers are built specifically for the UAE/Gulf markets. With imports, buyers are taking a huge risk."
Buyers ‘hesitant’
The demand for EVs in the UAE, whether sold through official dealerships or imported, continue to rise. Imported EVs have been quite popular with a sizeable base of buyers, when it comes to high-demand luxury models. In many cases, some of the imported EVs cost lower than buying through an official dealer, after key sourcing markets such as China saw a glut in their own domestic production.
Buyers are already very hesitant to buy EVs, especially imported ones. They are worried about what the maintenance costs.
But after April, there is now a re-think going on. “Buyers are already very hesitant to buy EVs, especially imported ones,” said Hamid Shah, CEO of the secondhand seller 4x4 Motors. “They are worried about what the maintenance costs. As of now, we are not looking to bring in imported EVs. The same with hybrids.”
Other dealerships too are now taking stock of the situation. It could be that demand for imports could improve later on if buyers shed their doubts.
Insurance charges
Until then, this could also open up new opportunities for official dealerships in the UAE. Already, there are promotions running with heavy incentives backing their EV models. Dealers have co-opted banks to convince potential buyers on the cost of ownership through the ongoing offers. This summer, expect dealers to go all out on landing more EV customers.
“No one doubts there will be a gradual transition towards more EVs on the roads,” said an official at a local dealer. “The April floods have provided a stark choice for buyers in deciding whether to go with official dealers – and have peace of mind on after-sales service – or go for unbacked imported vehicles.”
Also, fleet operators continue to invest heavily in EVs. “While we are aware of the current (higher) insurance premiums, we are confident that the long-term savings and environmental benefits of our zero-emission fleet outweigh the initial insurance costs,” said Anmol Singh Jaggi, co-founder of BluSmart, a fleet operator.
Sales to fleets will continue to drive EV sales in the UAE for the near term, with that to individuals growing at its own pace on a parallel track. For local dealerships, as long as the bulk of this demand happens through them, they will be doing fine.
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