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UAE ahead in consumer readiness for new mobility solutions

Findings highlight the UAE’s significant interest in transitioning to electric vehicles

Published: Wed 2 Oct 2024, 7:38 PM

By
Issac John

Tesla vehicles at a parking lot in Dubai. More than half of the respondentts in the UAE said they want that their next vehicle will have an alternative powertrain, with significant interest in electric and plug-in hybrid options. — File photo

More than half of UAE respondents in a survey intend to move to hybrid cars during their next car purchase, while less than 15 per cent intend to move to fully electric cars.

The perceived future importance of having a car is not only increasing in UAE but is higher than any other major region globally, even China, according to a study released by Arthur D. Little (ADL).

The fourth edition of its influential Future of Automotive Mobility report, presents a detailed analysis of current and future trends in the automotive industry. The report examines car ownership, electric vehicles, autonomous driving, and new mobility services within the UAE.

This year’s study, with insights from over 16,000 respondents across 25 countries, revealed that approximately 80 per cent of UAE respondents expressed interest in buying new (as opposed to used) cars, above Europe and the USA which have mature used vehicle markets.

"The UAE is at the forefront of automotive innovation and consumer readiness for new mobility solutions," said Alan Martinovich, partner and head of automotive practice in the Middle East and India at Arthur D. Little.

"Our findings highlight the UAE’s significant interest in transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies, and a strong inclination towards digital transactions in car purchases. These insights are critical for automotive manufacturers and policymakers navigating the evolving landscape of the UAE automotive market," said Martinovich.

While a high number of UAE respondents currently own internal combustion engine vehicles, more than half intend that their next vehicle will have an alternative powertrain, with significant interest in electric and plug-in hybrid options. Less than 15 per cent plan to opt for pure battery electric vehicles, shows the study.

Ride-hailing services are the most popular new mobility option among UAE residents, with higher usage rates than traditional car sharing and ride sharing. The study indicates a strong openness to switching to alternative transport modes given the quality and service levels available today.

According to the study, consumers in the UAE are among the most open globally to adopting autonomous vehicles, with a significant increase in favorable attitudes from 32 per cent in previous years to 60 per cent this year versus approximately 30 per cent in mature markets. “Safety concerns, both human and machine-related, remain the primary obstacles to broader adoption.”

"Our study confirms the promising market opportunities for car manufacturers and distributors in the UAE," said Philipp Seidel, principal at Arthur D. Little and co-author of the study. "Consumers in the Emirates show a great and increasing appetite for cars while being among the most demanding globally when it comes to latest vehicle technologies and a seamless purchase and service experience."

The study found that the internet has become a dominant channel for UAE residents throughout the car buying process, from finding the right vehicle to arranging test drives and closing deals. The UAE car buyers visit dealerships an average of 3.9 times before making a purchase, higher than any other region in the world, emphasizing the need for efficient integration of online and offline experiences.

Upwards of 53 per cent of respondents from the region would prefer to ‘close the deal’ and complete the purchase of their car online, which is the highest for any region in the world, according to the study. Sustainability is a key factor cited by UAE consumers as influencing car choice. The UAE scored among the top half of regions, highlighting the importance of environmental considerations.