Insuring an electric car in the UAE has become much more costly, after last year's record floods, but industry experts believe the future remains bright for the vehicle segment as sales increase.
Insurancemarket.ae, one of the country's leading providers, said insuring an electric vehicle on average costs 72 per cent more on average than a petrol or diesel-powered alternative.
Figures compiled by the company show the average comprehensive EV policy currently stands at about Dh4,992 a year, compared to Dh2,895 for regular internal combustion engine vehicles, when comparing vehicles of similar body type.
“Repair costs for EVs are higher due to specialised parts and battery systems,” said Hitesh Motwani, deputy chief executive of the insurance group.
“There are fewer authorised repair centres, and parts often have to be shipped internationally.”
The repair problems were brought into sharp focus by the unprecedented floods that hit the UAE in April 2024, when mass EV battery failures drove up insurance claims.
Yet Mr Motwani believes that the market is entering a “transition phase” that will see more nuanced pricing, factoring in battery age, charging behaviour and self-driving features.
“More insurers are also partnering with authorised EV dealers to streamline the repairs and claim services,” he said. “We’re watching the space evolve from novelty to norm – and as that happens, customers can expect more competitive, data-driven pricing, but also a need to be more informed buyers.”
EVs are expected to make up more than 15 per cent of all sales in the UAE by 2030, and could reach about 110,500 vehicles five years later, PwC's recently released Mobility Outlook report found.
The UAE has set an ambitious target of having EVs make up half of the cars on the roads by 2050, in support of the nation's net-zero drive.
Staying the course
When Toshita Chauhan took delivery of her Tesla three years ago, the choice was less about a moral stand on emissions than a hard-headed calculation.
“I wanted an SUV I could drive for the next decade,” said Ms Chauhan, chief business officer at another leading provider, Policybazaar.ae. “At the time, fuel savings, free charging for Teslas, and monthly instalments comparable to a petrol model made the decisions obvious.”
Today, with insurance premiums for electric vehicles on the rise, her budget is different.
“Back then, the cost difference wasn't much,” said Ms Chauhan. “But even factoring in that increase, I'm still saving on running costs. For two years, charging was free – I was paying nothing beyond road tolls and the odd car wash.”
EV boom reshapes the roads
While the UAE's EV market has faced challenges, it has enjoyed healthy growth in recent years.
EVs made up 13 per cent of new car sales in 2023, up from 0.7 per cent in 2021, according to government data quoted by e-mobility specialist Heiko Seitz.
To put this into perspective, this is equal to between 28,000 and 33,000 new EVs, including plug-in hybrids, sold in 2023, compared to only a few thousand in 2021. “This marks one of the fastest adoption curves in the region,” said Mr Seitz.
Regionally, Mr Seitz told The National, this means that the UAE now leads the Middle East in EV penetration, well ahead of neighbouring countries where electric models still account for about one per cent or less of new car sales.
“Nearly two-thirds of UAE residents now say they intend to make an EV their primary vehicle by 2025, showing how quickly public sentiment is shifting in favour of more sustainable mobility,” said Seitz, the global eMobility leader at PwC Middle East. “A growing variety of EV models at accessible price points is helping to accelerate this adoption.”
Overcoming roadblocks
The UAE is quickly overcoming traditional barriers to EV adoption, particularly charging access, range concerns, and upfront costs.
As such, Mr Seitz believes that the conditions are “highly favourable” for ownership. “Running costs are a fraction of petrol, range anxiety is easing, and the variety of models at accessible price points is growing fast.”
In Abu Dhabi alone for example, a joint venture between Adnoc and Taqa aims to install 70,000 EV chargers by 2030.
Drivers can now also travel further with a charged battery, as many new EVs are able to cover distances of more than 400km on a full charge, with premium models exceeding 600km.
Maturing market to bring new realities
For drivers such as Ms Chauhan, the honeymoon period may be over – Tesla's once-free charging network now comes at a cost. A minor incident left her waiting for three months for a replacement bumper shipped from China. “If it had been major damage, that would have been a serious inconvenience,” she told The National.
Policybazaar's data reflects a shift in buying behaviour. There are more enquiries for brands from China, such as BYD, and for premium EVs from brands such as Mercedes and Volvo, as well a growing second-hand Tesla market. “We're also seeing that EVs aren't always the primary car in a household,” she notes. “People still keep a petrol car for longer trips or as a back-up.”
Manufacturers push confidence
Concerns over insurance are temporary growing pains, as EV adoption grows and more data becomes available, said Roberto Lopes Da Silva, UAE general manager of electric car brand Nio.
“We expect pricing to normalise. Moreover, continued dialogue between insurers, regulators, and EV manufacturers will be key in bridging this gap and making EV ownership more accessible,” he told The National.
Nio's customers, he adds, are often “forward-thinking individuals who are enthusiastic about technology and sustainability, especially in the premium to luxury segment.”
For Mr Lopes Da Silva, this dynamic environment in the UAE means products must truly differentiate themselves, be it in range, technology, design, or customer experience.
He adds that the driving range of an electric vehicle depends on several variables, including the model type, battery capacity, and real-world driving conditions such as speed, terrain, and climate. For example, the Nio ET5 Long Range variant has a certified range of up to 615 kilometres. For daily use, under mixed driving conditions, customers can realistically expect between 500km to 550km on a full charge.
Evolving sector
As the UAE's EV market matures, infrastructure is expanding and resale values are expected to stabilise.
Ms Chauhan said she is committed. “Driving my Tesla has become second nature,” she said, describing the experience of driving a petrol car like stepping back in time.
With the UAE government's goal of half of the cars on the road to be electric by 2050 – she is expected to have a lot more company on the roads.
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Company%20Profile
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Sholto Byrnes on Myanmar politics
Company profile
Company name: Nestrom
Started: 2017
Co-founders: Yousef Wadi, Kanaan Manasrah and Shadi Shalabi
Based: Jordan
Sector: Technology
Initial investment: Close to $100,000
Investors: Propeller, 500 Startups, Wamda Capital, Agrimatico, Techstars and some angel investors
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
UAE currency: the story behind the money in your pockets
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Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
On sale: now
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Paris Can Wait
Dir: Eleanor Coppola
Starring: Alec Baldwin, Diane Lane, Arnaud Viard
Two stars
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The specs
Engine: 3.0-litre twin-turbo flat-six
Power: 480hp at 6,500rpm
Torque: 570Nm from 2,300-5,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 10.4L/100km
Price: from Dh547,600
On sale: now
Islamic%20Architecture%3A%20A%20World%20History
%3Cp%3E%3Cstrong%3EAuthor%3A%3C%2Fstrong%3E%20Eric%20Broug%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Thames%20%26amp%3B%20Hudson%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20336%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20September%3C%2Fp%3E%0A
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Spec%20sheet
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Company profile
Company: Rent Your Wardrobe
Date started: May 2021
Founder: Mamta Arora
Based: Dubai
Sector: Clothes rental subscription
Stage: Bootstrapped, self-funded
Kanye%20West
%3Cp%3EYe%20%E2%80%94%20the%20rapper%20formerly%20known%20as%20Kanye%20West%20%E2%80%94%20has%20seen%20his%20net%20worth%20fall%20to%20%24400%20million%20in%20recent%20weeks.%20That%E2%80%99s%20a%20precipitous%20drop%20from%20Bloomberg%E2%80%99s%20estimates%20of%20%246.8%20billion%20at%20the%20end%20of%202021.%3Cbr%3EYe%E2%80%99s%20wealth%20plunged%20after%20business%20partners%2C%20including%20Adidas%2C%20severed%20ties%20with%20him%20on%20the%20back%20of%20anti-Semitic%20remarks%20earlier%20this%20year.%3Cbr%3EWest%E2%80%99s%20present%20net%20worth%20derives%20from%20cash%2C%20his%20music%2C%20real%20estate%20and%20a%20stake%20in%20former%20wife%20Kim%20Kardashian%E2%80%99s%20shapewear%20firm%2C%20Skims.%3C%2Fp%3E%0A
Rashid & Rajab
Director: Mohammed Saeed Harib
Stars: Shadi Alfons, Marwan Abdullah, Doaa Mostafa Ragab
Two stars out of five
New Zealand 57-0 South Africa
Tries: Rieko Ioane, Nehe Milner-Skudder (2), Scott Barrett, Brodie Retallick, Ofa Tu'ungfasi, Lima Sopoaga, Codie Taylor. Conversions: Beauden Barrett (7). Penalty: Beauden Barrett
BACK%20TO%20ALEXANDRIA
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ETamer%20Ruggli%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENadine%20Labaki%2C%20Fanny%20Ardant%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3.5%2F5%3C%2Fp%3E%0A
21 Lessons for the 21st Century
Yuval Noah Harari, Jonathan Cape
