Electric vehicle regulation and law in the United Arab Emirates

The United Arab Emirates (“UAE”) is increasingly looking at ways to promote and utilise clean energy. With recent developers entering the UAE market, incentives to buy electric cars and a push towards these clean energy initiatives, the UAE is looking to establish itself as a leading regional and global player in the utilisation of electric vehicle technology. Of the seven Emirates, which form the UAE, Dubai is the most vocal and advanced in their support for this technology.

1. What EVs have been deployed in your jurisdiction to date?

As at August 2016, it was reported that there were 200 electric vehicles registered. Since the opening of the Tesla showroom in Dubai in June 2017, there has been an increasing governmental push to encourage individuals to buy electric cars over a conventional petrol model. A more recent development has been the introduction of “UberONE” service, which offers Uber customers an opportunity to be driven by one of 50 Tesla ModelX cars as well as some of the car rental companies offering electrical cars such as Renault Zoe with the added benefits of free charging and no road tolls. We are aware to date that other than Tesla, the main developer of electric cars in the UAE includes Renault, Mitsubishi and Toyota. The Emirates of Dubai has also set an ambitious target of having 40,000 electric vehicles registered by 2030.

2. Is there any specific legislation for/regulation of EVs in your jurisdiction?

The Emirates Authority for Standardisation and Metrology have recently prepared draft legislation to regulate the sale and use of electric vehicles. This has resulted in other GCC countries using this draft legislation as the basis of producing their own regulations.

The UAE has implemented the UAE Energy Strategy 2050, which aims to increase the contribution to clean energy by 50% by 2050. It will also aim to ensure there is an energy mix that combines renewable, nuclear and clean energy sources to meet the UAE’s economic requirements and environmental goals. This strategy will be implemented in three phases. Phase one will accelerate efficient consumption of energy, the second phase shall explore new solutions to integrate transportation solutions with energy and the final phase will focus on research and development to supply sustainable energy.

The Supreme Council of Energy issued in March 2017, the Dubai Administrative Decision No.1 of 2017 in respect of the establishment and installation of charging stations for electric vehicles in Dubai. This requires all organisations, whether private or public and any developers in Dubai to get approval from Dubai Electricity and Water Authority (“DEWA”) before they are permitted to install, operate or maintain any charging station. This decision was implemented to continue the ongoing commitment to the Dubai Clean Energy Strategy 2050, which aims to ensure Dubai, has the lowest carbon footprint in the world. This is also in parallel with the Dubai Carbon Abatement Strategy to reduce 16% of carbon emissions by 2021. Private owners of electric vehicle charging stations in Abu Dhabi must seek approval from the Abu Dhabi Distribution Company on the viability of facilities, which includes the Abu Dhabi Distribution Company inspecting the facilities prior to these being utilised.

We are aware that the following charging stations are available across the UAE:

Emirate

Number of charging stations

Abu Dhabi

As at July 2017 there are currently 22 charging stations in Abu Dhabi. These include 10 at Yas Mall and three at each amusement park.

Dubai

As at December 2015, DEWA had installed 100 charging stations. Their aim is to have doubled this by 2018.

Sharjah

Ras Al Khamiah and Fujairah As at February 2017, there are currently 5 charging stations.

3. What measures promote EVs in your jurisdiction?

To entice individuals to purchase electric vehicles, Dubai has recently announced the following new incentives:

  1. free parking in certain areas;
  2. toll exemptions;
  3. discounts on registration fees;
  4. free charging stations; and
  5. greenbank loans.

Individuals who purchase an electric vehicle in Dubai will be able to park free in designated areas including Madinat Jumeirah, Jumeirah Beach Residence and Dubai International Airport. There are currently 40 parking spaces designated for electric vehicles with more to be added in the near future. With the purchase of an electric car, each driver will be entitled to a fee exemption to each of the seven tollgates and to a 15% discount on all car registration and renewal fees. Greenbank loans were also implemented in May 2017 to make purchasing electric cars more accessible to both the public and private organisations.

At present, there are not Federal level incentives which apply UAE wide and it is for each individual Emirate to establish and implement their own plan.

4. Who are the main entities (e.G. Developers, government, System Operator) and what are their roles in the deployment of EVs in your jurisdiction?

As noted above, DEWA are responsible for the installation of charging stations in the Dubai. Green Parking work closely with DEWA and their role is to physically implement and develop such charging stations. RTA has played a key role in electric vehicles by already purchasing from Tesla a fleet of 200 electric vehicles to operate as part of their taxi fleet from Dubai Airport. In September 2017, RTA took delivery of 50 of the 200 electric vehicles, with another 75 expected in 2018 and a final 75 in 2019. Dubai Future Foundation are an organisation in the Dubai who are responsible for electric vehicles. One of their key initiatives is under the Dubai Autonomous Transportation Strategy, which aims to transform 25% of the transportation in Dubai to autonomous mode by 2030. The Dubai Future Foundation work closely with the Dubai Smart Government whose primary role is to look at implementing regulations on electric and self automated cars and driving initiatives on street planning for such vehicles.

5. What are the main challenges to further deployment of EVs in your jurisdiction? How have EV developers sought to overcome these challenges to date?

The climate of the UAE proposes many challenges to the successful implementation of electric vehicles. Firstly, the extreme heat can greatly effect battery life. Tesla notes that their Model S can travel 632 kilometres on full charge, with Model X following closely at 565 kilometres. However, this is based on driving without air conditioning and does not account for the sandy conditions of the UAE. Although not expressed to be a way to overcome this challenge, solar vehicles or a hybrid design could enhance battery life. Developer will also need to work on developing efficient batteries and charges given the small number of charging stations currently placed around the UAE.

A second issue is being able to provide those who live in high-rise buildings with charging stations in the car parks of their buildings. For those owners of electric vehicles who may live in a villa, the installation and space should be available to install their own private charging station, which should therefore not be an issue, unless price of purchasing and installing one is prohibitively costly. High-rise residents will have to rely on the construction buildings taking into account the installation of enough accessible charging stations within the car park for all residents. Where the buildings are not new builds. Existing owners will need to be incentivised to have these installed. With the cost of electricity being high in the UAE, free charging stations would be one way to overcome this challenge.

Petrol prices in the UAE have historically been very low. In order to incentivise individuals to move away from traditional petrol vehicles, charging electric vehicles will need to compete with these low prices. DEWA’s managing director has stated that it would be 80% cheaper to charge an electric car than fill up the tank of a petrol vehicle. To charge a Tesla X it would cost AED 29 compared to AED 150 to fill up a similar petrol model.

Public charging stations will need to have an efficient system in place to prevent unnecessary delays to their customers. Petrol stations, particularly those on main transit routes, can face delays at peak times. For electric vehicles, the process of charging will take significantly longer than filling a traditional petrol or diesel vehicle. The creation of an efficient, publically accessible and user-friendly charging infrastructure will be essential. The government will need to ensure charging stations are located near retail spaces such as malls, supermarkets, banks, restaurants and fast food chains, and leisure facilities to allow drivers to go about their everyday lives whilst allowing their vehicles to charge at the same time.

Portrait ofBlair Jones
Blair Jones
Legal Director
Dubai
Poulad Berenjforoush