The electrifying shift: Why fleet is outpacing individual adoption?

The UAE is known as a car-driving nation, but it is also increasingly a green one. As per our internal estimates, there are approximately 100,000 electric and hybrid vehicles on road in the UAE – with the UAE government aiming to have at least 10 per cent of all vehicles on the road to be electric by 2030.

A stronger awareness on climate change action and mission-oriented government strategies, such as the UAE Net Zero 2050 Strategy and Dubai’s Green Mobility Strategy 2030, are propelling the nation towards greener roads. However, it is worth noting that the pace of adoption is not uniform across the board. Fleet owners, particularly companies and government entities, are ahead in the race for electrification, while individual car owners are taking their time to adapt.

A closer look at the numbers shows the disparity. As per our industry data, as of July 2024, nearly 11 per cent of all vehicles sold in the UAE are New Energy Vehicles (NEVs — Electric & Hybrid Vehicles). While at

Al Futtaim Automotive, the numbers paint a greener picture: with NEVs already accounting for 23 per cent of our total volumes. If we break down our numbers even further, a vast majority, that is, 70 per cent of our NEV sales were to fleet customers, with individual buyers representing the remaining 30 per cent. This trend is not unique to Al Futtaim Automotive — it mirrors the broader market. Going by this data, fleet electrification is certainly outpacing individual adoption, highlighting a gap in the transition to cleaner energy.

One of the primary drivers is the mandate from the UAE government, asking public entities to shift towards greener mobility as part of their sustainability commitments. At the same time, corporations across the region have set sustainability targets and electrifying fleet is the best way to achieve that.

These large organisations are also better positioned to calculate the total cost of ownership (TCO) of electric vehicles, which is more favourable over time compared to internal combustion engine (ICE) vehicles. Fleet managers are looking at long-term savings, and the economic advantage of EVs becomes more apparent the more they are used.

In addition, fleet operators are more adaptable to new driving behaviours required by electric vehicles, such as planning around charging infrastructure. For them, the transition is a business decision that aligns with sustainability goals and offers significant financial benefits.

Fleet operators also benefit from having an integrated end-to-end ecosystem at their disposal through distributors like Al-] Futtaim Automotive, where we offer not only the vehicles but also the accompanying charging solution, aftersales packages, and de-fleeting (buyback) options.

While UAE customers have shown strong interest and readiness to embrace greener mobility, some factors such as charging accessibility, difficulties of installing home chargers and electric vehicle affordability, continue to influence the pace of adoption. However, significant progress is being made to address these barriers. As per Roland Berger’s recent EV Charging report, the UAE leads the region in the number of public EV chargers. With Dewa planning to expand the network to 1,000 public chargers by 2025, the landscape is steadily improving.

Concerns around range anxiety and charging infrastructure are easing, as the same report indicates that 50 per cent of respondents believe public charging has become easier over the past six months. As more chargers become available and our efforts in sustainable mobility solutions continue, the transition to electrified vehicles will continue to gain momentum.

As we look to the future, it's clear that while fleets are driving the transition, we need to focus on supporting individual adoption as well. Overcoming the barriers for personal car buyers — whether it’s improving infrastructure or offering more affordable options - is key to achieving the UAE's ambitious sustainability goals.

Electrification isn’t just about selling cars; it’s about creating an ecosystem that makes greener mobility a practical, smarter and delightful choice for everyone, be they individual car owners or fleet managers.