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UAE motorists fail to see “full picture” when buying EVs on grey market

Customers purchasing electric vehicles on the grey market will end up with variants of models which have not been designed and built for the UAE market, leading to service and financial issues later on

Car enthusiasts that are looking to purchase an electric vehicle (EV) on the UAE’s grey market often fail to grasp the magnitude of the issues they will ultimately end up facing after their purchase.

Like many manufacturers and car dealers, Victor Dalmau, managing director of Volkswagen Middle East, says that he is “very concerned” about customers not being privy to all the information they need in order for them to make an informed decision. “Today, they are buying these cars with partial information.”

Interest in EVs across the Middle East region is increasing, in line with global trends, he noted; in the UAE specifically, this interest is growing fast. When compared to other global markets, Middle Eastern customers are still in the early stages of the adoption of EVs, and heavily influenced by their personal living and financial situation.

“We believe the interest of EVs in the Middle East is being led by demand for premium brands, with these customers typically having access to their own charging stations and having more than one vehicle within the household,” Dalmau said.

The problem arises when customers get tempted by the comparatively lower prices on EV models that make their way to the UAE’s grey market. In the case of Volkswagen’s all-electric products – such as the ID.3, ID.4, ID.5, and ID.6 – which are currently being sold by unofficial importers in the UAE, customers will end up with the Chinese variants of these products which have not been designed and built for the UAE market.

Dalmau says that there are three consequences for customers buying these vehicles. Firstly, these vehicles do not meet all the legal requirements set by the UAE authorities. Secondly, these vehicles have not been tested, nor authorised, by Volkswagen to be used in the UAE. Therefore, the brand cannot guarantee their full proper functionality. Lastly, as a consequence of not being authorised by the manufacturer, these products have no warranty, nor can they be serviced by any official Volkswagen dealerships.

Dalmau explained that Volkswagen EVs are run by a software that manages all functionalities of the car, from the infotainment to the power management of the batteries. Similar to our phones, Volkswagen constantly updates the cars via the Internet. Since these cars have the software designed for the Chinese market, Volkswagen would not be in a position to keep them updated in the UAE.

“Imagine you buy a phone and the manufacturer cannot update it: soon it will have limitations in its capabilities, or even malfunctions,” Dalmau said. He also noted that the UAE has a very unique climate with extreme temperatures and humidity. As these vehicles have not been tested nor designed for the UAE market, Volkswagen cannot guarantee the proper functionality of elements such as the charging capacity of the batteries, kilometer range, or the power of the AC system.

“The UAE law requires, among many other things, all new models to have a safety feature called e-Call, which enables the car to automatically notify the police and emergency services should you be in an accident and unable to so yourself,” he added. “An unofficially imported car cannot perform this function as the e-Call is not designed for the UAE network. Also, since our official dealers will not be able to service these cars, we cannot guarantee to our customers that these cars will be serviced by technicians that are properly trained by Volkswagen, using genuine parts and repair tools that ensure the quality in repair the brand is committed to.”

“A vehicle is one of the most important purchases in most households, so if something goes wrong, the emotional and financial damage to the customer can be hard, and that is what concerns us the most,” Dalmau said. “At Volkswagen, we strive to ensure that customers driving our products are getting the best product and service experience. This is something we can’t guarantee with these unofficially imported EVs.”

Looking ahead, Dalmau says that he sees the future of the automotive industry as strong and evolving rapidly towards EVs. The pace toward that shift will differ from market to market, based on the consumer mindset, as well as demand and the infrastructure required for these new vehicles.

“For Volkswagen our goal is clear,” said Dalmau. “It is to be the market leader for EV sales; and after the success of the ID family of products in Europe, America, and China, we’ve communicated clear targets. This includes that, by the year 2030, 70 per cent of all new car sales in Europe will be electric, and for the same time period in America and China EV car sales will sit at 50 per cent. In our region [Middle East], we look forward to starting this journey as soon as possible once the time is right.”

rohma@khaleejtimes.com