Tesla: Charging into the Middle East

Elon Musk’s announcement officially introducing Tesla’s zero-emission e-car Models S and X to Dubai is all the rage this week.

But why all the hoopla? The Tesla is by no means an easy buy at an estimated price tag of AED 275,000 for the sedan version and AED 344,000 for the SUV. But this is the UAE. Looks matter, and so does 0 to 60. This is where people can drive and own vehicles that are considered a dream elsewhere. Truth be told, the Tesla is probably just going to be another expensive car on UAE roads.

Or is it?

Sustainability has been the UAE Government’s favorite buzzword for a few years now. In 2015, the government linked domestic petrol and diesel prices to the global market; removing subsidies that had cost US$1bn a year over the last decade. Besides the positive fiscal impact, the move was part of a wider realignment of the energy policy geared to minimising the UAE’s carbon footprint. Just last month, the Dubai Supreme Council of Energy (DSCE), the Dubai Electricity and Water Authority (DEWA) and the Roads and Transport Authority (RTA) announced new targets to cut down carbon emissions by increasing the green mobility share; aiming for one in every ten cars on Dubai roads to be either a hybrid or fully electric. A major UAE bank has just announced a special loan to allow residents to buy and drive electric and hybrid cars of their choice. And the Dubai Taxi Corporation (DTC) has just ordered 200 Tesla e-cars for its fleet.

Is the trend evident yet?

The shift to sustainability is happening now, and not a moment too soon. The transition from being a petro-economy to one based on a mix of predominantly clean energy sources won’t happen overnight; but it is happening. Implications will be far-reaching – affecting purchase choices, carmakers, energy companies, insurers, health care, government funding, and more. Value shifts as a new ecosystem of mobility emerges.

Which is why Musk’s announcement has echoed so loudly. The Tesla founder didn’t just announce the introduction of his cars in the UAE; he promised to aid the setting up of a whole e-car ecosystem. Pledging tens of millions of dollars in the UAE for charging, service and support infrastructure is not just a huge challenge; it could perhaps be the catalyst the country needs to start buying electric. With Tesla, sustainable personal transport has finally arrived.

The UAE has had a long-standing love affair with cars, and has been a lot slower in introducing electric vehicles on its roads. The good news is that it is still ahead of other countries in the region. Fossil fuel is only going to get scarcer, and prices are only going to go higher. The introduction of the e-car might not spark a tsunami transition in buying habits. But what it will begin is a rising tide of sorts that will expedite the UAE Government’s efforts to shift its dependence on oil – to clean, renewable energy sources.

And will Tesla be the car that drives us into a sustainable future?  If Elon Musk has his way, it will.