Dubai: Want to import an electric vehicle into the UAE? Then make sure a Volkswagen EV model is not among your choices.
The UAE Ministry of Economy has just issued a directive that there can be no more imports of new/pre-owned VW-built EVs into the country other than through the authorised dealership.
The decision comes after concerns were raised repeatedly at the highest levels about such import of EVs typically built to 'Made in China' specs and not been tweaked to take in the vastly different climatic conditions in the UAE.
“There are second-hand dealers who cashed in on the fairly high demand for popular EV models among UAE buyers,” said a senior source with a luxury car dealership in Dubai. “Apart from Tesla, of course, Volkswagen EV models were the other popular choice. But these models were sold with no manufacturer warranty – buyers here were taking on a major risk with these imported vehicles.”
No local availability
Prospective EV car buyers in the UAE have looked outside to source their models as some of these are yet to be formally launched for the Gulf markets. Most of the legacy carmakers are still in the initial stages of ramping up their EV productions – and it’s still going to take time before demand and supply firmly slot into place.
This is what some of the second-hand dealers have sought to exploit, with the promise of 3-6 weeks of delivery time and at prices that these buyers are willing to shell out. Through these last two years, selling EVs have proved lucrative for these dealer-importers.
And placing these buyers at risk. With VW, its ID.4 was a particularly popular model with importers.
“The resolution from the Ministry of Economy UAE, reaffirms our position that customers should purchase Volkswagen products from the official dealer only to ensure an experience that meets the high standards that comes with owning a Volkswagen,” said K. Rajaram, CEO at Al Nabooda Automobiles, the local dealership for VW, Audi and Porsche. “I’d like to thank the Ministry of Economy for taking these measures to safeguard the interests of prospective car buyers in the UAE.
“We echo the voice of our colleagues at Volkswagen Middle East that the interests and safety of our customers take priority over all else.”
We welcome this (Ministry of Economy) resolution. This ensures that moving forward all Volkswagens sold in the UAE are through official, approved dealers and - importantly - are homologated to meet UAE market requirements
Growing EV numbers in the UAE
Sales of electric vehicles in the UAE represented 4-5 per cent of the 200,000 plus new car sales in 2022, with fleet orders making a sizeable portion of the demand. There is also a growing base of owners with Tesla and EV models from other manufacturers.
“Starting this year, there will be more UAE dealerships offering EV options along with hybrid and fuel driven vehicles,” said Suliman Al-Zaben, Director of Hyundai and Genesis brands at Juma Al Majid Est.. “But the pricing of EV models are still on the higher side due to the cost of technology – that means it will take longer for them to find buyers preferring their cars to cost less than Dh100,000.
“EV prices need to come well below Dh100,000 to make gains in the mass market.”
Will the Chinese make the difference?
Multiple industry sources say they are looking to see whether Chinese carmakers will speed up launches of their own EV options between now and the next five years. Specifically, they feel the Chinese could soon launch models at around the Dh120,000-Dh150,000 mark, and then bring that further down. That’s going to be the big breakthrough moment for electric vehicle sales in the UAE.”
Or go for hybrid?
Local dealers are also pinning hopes that more hybrid sales will happen until EV demand truly goes big and wide in the UAE. Now, even mass-market models have got their hybrid versions in the showrooms - or made available on order.
"More than an immediate rise in demand for EVs among buyers, it will be hybrids that will lead the transformation," said a dealer. "This is where you are already seeing models retailing for less than Dh100,000. And UAE car buyers are seriously looking at hybrids."