Electric or petrol: Which car is more economical for residents to own and drive?

Considering the prices of the electric cars and the low fuel prices in the GCC region, the gain from the fuel costs, isn't attractive enough for the buyers to opt for electric cars instead of petrol cars.

Dubai - Considering the high cost of electric car and the low fuel prices in the GCC, it nearly kills the purpose of saving

By Waheed Abbas

Published: Sun 13 May 2018, 9:00 PM

Last updated: Mon 14 May 2018, 2:10 AM

The UAE is increasingly pushing to replace fuel vehicles with electric vehicles (EVs) but the question is which option is more affordable and economical for the residents to own and drive.
A new study has revealed that driving a Tesla Model 3 for 100 kilometres is 200 per cent more economical than driving a petrol vehicle for the same distance. But considering the high cost of Tesla car and the low fuel prices, it nearly kills the purpose of saving to own and drive an electronic vehicle for the UAE residents.
"With Dubai prices for electricity and petrol, it would cost a $1.4 (Dh5.14) to drive a Tesla Model 3 for 100km. In comparison, the same distance in a petrol car would cost $4.3 (Dh15.78).
"However, some of the top selling cars in the UAE costs about one-third as much as Tesla. Considering the prices of the electric cars and the low fuel prices in the GCC region, the gain from the fuel costs, isn't attractive enough for the buyers to opt for electric cars instead of petrol cars," said MR Raghu, managing director, Marmore Mena Intelligence.
For instance, based on the savings per 100km and the average price of the cars, it would take a UAE driver 2.2 million kms to recover the additional cost incurred. The disparity in pricing is larger, if you compare more economical petrol cars with Tesla, he added.
However, figures showed that the volume of petrol sold in the UAE declined last year, which can attributed to a host of reasons including more and more government entities shifting their fleet towards electric and hybrid vehicles. Dubai residents are increasingly opting for public transport services, car-sharing which has been legalised by the authorities as well as the rise in the fuel prices which have been on the rise since the UAE opted for deregulating the price and aligned it with the international rates.
According to Abu Dhabi National Oil Company (Adnoc), around 1,147.3 million litres of 91 unleaded gasoline was sold last year as compard to 1,204.3m litres in the previous year. While 4,597.3m lietres of 95 unleaded gasoline was sold last year as against 4,947.7m litres in 2017. While a total of 259.1m litres of most expensive 98 unleaded gasoline was sold last year as against 310.8m litres in the previous year. Overall, 6,003.7 million litres of fuel was sold last year as against 6,462.7m litres in the previous year.
According to Axel Dreyer, general manager, Galadari Automobiles Co, distributor of Mazda in the UAE: "First we have to consider the fact that electric or hybrid vehicles are higher priced than its normal combustion engine models. To make it attractive there need to be substantial support schemes from the government to reduce this gap. Secondly, the majority of residents in the UAE are living in apartments where the possibility to charge the vehicle overnight is very limited. Without having the access to an extensive network of charging stations the usage of electric cars can have limitations."
"Other factor is the limited range of the electric cars, especially considering the weather in the UAE with high temperatures and extensive use of air-conditioning - both are impacting the range significantly," Dreyer said.
"The development of batteries with regards to size, weight, capacity and charging time is the crucial factor to realise further growth of electric vehicles worldwide. Mazda last year stepped into a joint venture with Toyota to develop new hybrid powertrain and it is looking forward to new hybrid models within 2-3 years," he added.
Raghu said that hybrid/electric cars are attractive alternative in countries with high fuel prices, but in the GCC countries fuel prices are low. The electric cars are economical than petrol cars in oil importing countries.
According to Marmore, Tesla Model S costs around $77,490 as against $16,335 for Toyota Corolla, $21,330 for Nissan Altima, $24,273 for Mitsubishi Pajero and $22,653 for Toyota Camry.
The analysts said that a major reason not to choose an electric vehicle is due to absence of charging infrastructure. The current range for 2018 Nissan Leaf is around 241-257km with full charge of 40kWh battery, while the Tesla Model 3 is 354-498km with full charge of 75 kWh.
Though this range has relatively improved compared to the earlier models, absence of enough charging points to charge their cars and the problem of getting stranded in the middle of nowhere is a major concern. There is almost a complete absence of a public charging network in the GCC region. Amongst the GCC countries, UAE has the most developed charging infrastructure which includes 100 charging stations installed by the Dubai Electricity and Water Authority (Dewa) all over the emirate, each capable of powering 24 cars simultaneously. Additionally, Abu Dhabi National Oil Company plans to raise its 12 charging stations to 20 in the capital, it said.
Moreover, the authorities need to ensure robust regulations are in place to support consumers looking to make a smart move to electric vehicles. The picture could certainly become much clearer over the decade as technological advancements bring higher efficiencies and there develops a genuine need for EVs as an economical and environmental solution. For now, disruption is still a long drive ahead.
- waheedabbas@khaleejtimes.com