With the transport sector accounting for a major part of greenhouse emissions in the United Arab Emirates (“UAE”) and the Kingdom of Saudi Arabia (“KSA”), the rapid take up of Electric Vehicles (“EVs”) will be vital for the UAE and KSA to meet their carbon neutrality targets by 2050 and 2060 respectively.
In the UAE, encouragement to transition to EVs has been enhanced by incentives and measures promoting EVs, such as the Roads and Transport Authority’s (“RTA”) creation of free parking spaces, exemptions from RTA EV registration and renewal fees and a distinguished licence plate. In parallel with this, the necessity for EV Supply Equipment (“EVSE”, often known as ‘charging stations’ or ‘charging points’) is apparent.
Rapid development and increasing engagement with the private sector to develop EVSE has brought accompanying commercial concerns regarding building requirements, import and export standards, and liabilities in respect of the charging points themselves.
In what follows, we provide a closer look at the key developments in the EV sector in each country.
The UAE was ranked number 8 in the Global Electric Mobility Readiness Index 2022 (the only GCC country in the top 10). Currently, the country has one of the biggest charging-station-to-vehicle ratios in the world. Furthermore, the UAE differs from KSA in that corporate entities must have an awareness of the differing regulatory policies and legislation of each emirate that are rapidly being released in respect of EV charging infrastructure.
Recent EV initiatives and developments
The September 2022 agreement between the Khalifa Industrial Zone Abu Dhabi and green technology company, NWTN, for an EV assembly facility is an example of this drive for more EVs. More recently, in February 2023, the RTA announced its endorsement to transform Dubai taxis into electric, hybrid, and hydrogen-powered vehicles by 2027.
Recent EVSE initiatives and commercial developments
In Dubai, DEWA launched the EV Green Charger Initiative to open up EVSE to the public. Commercially, there has been an increasing focus on EVSE, demonstrated through the January 2023 announcements of the partnership by Regeny and EvGateway to deploy 10,000 EV charging networks throughout the UAE by 2030, and the establishment of EG20 (an ADNOC and TAQA joint venture) to build and operate EVSE in Abu Dhabi.
The increase in EVSE necessitates a sufficient regulatory framework in the UAE. UAE regulation in respect of EV charging infrastructure is predominantly at emirate level rather than federal level.
Central to Dubai regulation is the 2017 Dubai Supreme Council of Energy Directive on the establishment and installation of EV charging stations in Dubai, which set out that all public and private organisations and developers in Dubai must obtain DEWA approvals before establishing, installing, operating or maintaining any EV charging station.
In May 2022, Abu Dhabi Department of Energy (“ADDoE”) set out its regulatory policy for EVSE. Some of the key aspects to this include a series of compliance requirements for the EVSE installations. On the other hand, unlike in Dubai, no operational licence or permit is required by ADDoE for organisations and developers to operate (or own) EV charging infrastructure. EV charging infrastructure owners in private parking areas, or their appointed charge point owners, however, must obtain a commercial licence from the Department of Economic Development to undertake specified EV charging services and obtain prior approval by the distribution company for connecting the EV charging station.
Recent EV initiatives and developments
As with the UAE, KSA has developed EV targets such as setting out that at least 30% of all vehicles in Riyadh will be electric by 2030. There have been key commercial and government developments in respect of EVs, such as the development of KSA’s first electric vehicle brand, Ceer, which is expected to launch its first EV in 2025. Furthermore, Ceer’s EV production is intended to reach 150,000 cars annually. In addition, American electric vehicle manufacturer, Lucid Group, signed EV agreements with the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund, The Economic City at King Abdullah Economic City, and Gulf International Bank to provide financing and incentives to Lucid of up to $3.4 billion over the next 15 years, which further emphasises KSA’s investment in EVs.
Recent EVSE initiatives and commercial developments
Supported by a rise in EV sales and targeted government initiatives on a Kingdom-wide and municipality-wide scale, the KSA EV charging infrastructure market is forecasted to grow at an impressive rate during 2023-2027. KSA has targeted charging infrastructure with initiatives; in November 2020, the Ministry of Municipal Rural Affairs and Housing (“MOMRA”) announced its plan to allocate 5% of parking spaces for EVs and also install EV charging stations in all carparks.
As in the UAE, there has been an increase in private investment in EVSE in KSA. In February 2023, Tawal and Electromim signed a strategic partnership to enhance KSA’s EVSE. In November 2022, it was announced that Siemens has agreed to supply Electomim with EV chargers for its planned development of a charging network.
Similar to the UAE, the regulatory landscape for EVSEs in KSA is still evolving.
In August 2022, MOMRA announced the technical requirements for EVSE, which formalised previous publications and required compliance in relation to measures, aiming to regulate spatial and technical requirements of the EVSE sites.
In the same month, the Water and Electricity Regulatory Authority published the regulatory framework, establishing that those who wish to build and operate EVSE must comply with a series of regulatory requirements. Among other things, the operator of EVSE must obtain an approval from the electricity distributor in the area (i.e. the Saudi Electricity Company). In addition, the EVSE operator can only use electricity from an electricity distributor rather than the operator generating its own electricity, and importantly the installer or operator of EVSE must be qualified by the electricity distributor in the area.
The minimum standards and design of the EVSE, must comply with the technical regulations set out by the Saudi Standards, Metrology and Quality Organization.
It is important to note that the infancy of this regulation has led to a degree of uncertainty, particularly due to vague statements made in relation to the EV standards. There are also layers of agencies and bodies in charge of elements of the EV charging infrastructure regulations and requirements, each of which demand careful compliance on different matters.
Emerging challenges common to the UAE and KSA
The manufacturing, installation, and operation of EVSE includes a variety of stakeholders with potential risk exposure. These include the EVSE owners, the energy provider, the owner of property on which the EVSE is installed, the operator of the EVSE, the approving body or authority in relation to the EVSE and/ or individual municipalities. There must also be consideration of health and safety issues, such as the requirement to obtain conformity certificates for EVSE in Dubai. The allocation of risk between the operator and each stakeholder is a point of legal and commercial contention. Battery storage and the disposal of batteries for EVs is also a point of emerging regulation, with varying standards carrying potentially stringent requirements.
Common to both the UAE and KSA, there are concerns regarding issues with the EVSE in place, with network access and reliability and maintenance of the EVSE becoming increasingly important in the pace of EV uptake. In particular in KSA, where despite reports of increasing amounts of residents reportedly adopting EVs as a result of rising petrol prices, there are significant infrastructural challenges with swathes of desert and cities that are long distances from one another. Range anxiety is reinforced by batteries being drained quickly by air-conditioning.
As the EV charging network continues to expand to both keep up with, and encourage, the adoption of EVs, additional issues will arise and require governance. These areas will require 4 careful consideration by those producing, installing, operating, and maintaining these EV charging stations, as well as the relevant public bodies. The rapid growth in EV adoption is expected to lead to an increased demand for new connections to the grid. The connection process for households with a domestic EVSE is generally simple. Developers requiring larger scale charge point connections, however, can experience significant barriers such as the cost of connecting to the network and the pace and difficulty of the process of connection. Reducing barriers to network connections by ensuring efficient and timely processes for EVSE connection will play a major role in enabling widespread EV adoption in both KSA and the UAE.