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The Future of EV Charging: Spotlight on the UAE and Saudi Arabia16 May 2024

In the seventh of our “The Future of EV Charging: Spotlight on” series of articles, we look at the United Arab Emirates (“UAE”) and the Kingdom of Saudi Arabia (“KSA”).

"There has been a rapid development of electric vehicle infrastructure and EVs in the UAE facilitated through the legal framework and government policies at both a federal and emirate level."

The UAE and KSA are committed to achieving net zero, by 2050 and 2060, respectively. With the transport sector in both countries contributing towards carbon dioxide and nitrogen oxide emissions, e-mobility will be key to achieving their net zero targets.

UAE

There has been a rapid development of electric vehicle (“EV”) infrastructure and EVs in the UAE facilitated through the legal framework and government policies at both a federal and emirate level. Transport is one of the UAE’s six key decarbonisation industries at the heart of its net zero 2050 strategy. The UAE is ranked seventh in the Global Electric Mobility Readiness Index 2023 (“GEMRIX 2023″)¹ and has one of the largest charging-station-to-vehicle ratios in the world.

Under articles 120 and 121 of the UAE Constitution, the Union (i.e., the Federal Government) has exclusive legislative and executive jurisdiction over, among other things, electricity services. The emirates have jurisdiction in all matters not assigned to the exclusive jurisdiction of the Union. As such, the laws and regulations applicable to EVs apply at both a federal and emirate level. This article focusses on the two largest emirates by population, Abu Dhabi and Dubai. The UAE Net-Zero by 2050 strategic initiative is a national drive to achieve net zero emissions by 2050. The Ministry of Climate Change and Environment is responsible for collaboration at a national level to fulfil the UAE’s net zero objective.

Public and private sector collaboration is key to the UAE’s EV strategy. The National Electric Vehicles Policy (“NEVP”) aims to promote collaboration between federal and emirate stakeholders and the private sector to establish a national network of EV chargers. The NEVP has several goals, including reducing energy consumption in the transport sector by 20%, creating a centralised database of EV charging stations to streamline the charging process and enhance convenience for EV users throughout the UAE.

In May 2023, the Ministry of Energy and Infrastructure (“MoEI”) launched the “Global EV Market”, a project designed to develop the UAE into a global market for EVs. The project supports the shift to green mobility and aims to increase EVs to 50% of total vehicles on the UAE’s roads by 2050. The project includes co-operation agreements between the MoEI and leading private sector stakeholders in the e-mobility sector, with the latter agreeing to invest in establishing EV charging stations, operating them and investing in establishing EV service centres across the UAE. Also in 2023, the MoEI launched the National Platform for Electric Vehicles’ Chargers, including a mobile app to link users and a guide for installing EV charging stations to unify EV charger specifications nationwide.

At emirate level, in addition to numerous laws and regulations, Abu Dhabi and Dubai both have EV strategies. In Abu Dhabi, the Low-Emission Vehicle Strategy, issued by the Department of Municipalities and Transport in 2016, aims to support the uptake of low-emission vehicles.

In 2023, ADNOC Distribution and Abu Dhabi National Energy Company (“TAQA”) announced the formation of a new mobility joint venture, E2GO, to build and operate EV infrastructure in Abu Dhabi and the wider UAE. The partnership will include a network of fast chargers at key locations, with associated solutions such as parking and tolling services, in addition to related digital platforms to facilitate EV charging, to enhance customer service and unlock new revenue streams. The partnership envisages both parties entering into detailed joint venture arrangements as well as the completion of necessary transaction requirements, including obtaining relevant third party and regulatory approvals.

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Mhairi Main Garcia

Partner Dubai

"The Abu Dhabi Regulatory Policy sets out the requirements for planning of EV charging infrastructure, electricity supply to EVSE, and EV charging services to end customers."

In Dubai, the emirate’s Clean Energy Strategy 2050 and Net Zero Carbon Emissions Strategy 2050 aim to generate 100% of Dubai’s power from clean energy sources by 2050. As part of the Dubai Green Mobility Strategy, Dubai is materially expanding its existing EV charging infrastructure, to facilitate over 42,000 EVs by 2030. The Roads and Transport Authority (“RTA”) has rolled out a long-term strategy for net zero emission public transport by 2050, with progressive targets set for each decade leading up to a completely zero-emission fleet by 2050, incrementally shifting public transport vehicles to electric and hydrogen fuel sources.

Law and regulation

Notwithstanding the reservation of electricity services to the Union under article 120 of the UAE Constitution, the regulation of EVs and EV charging infrastructure in the UAE is primarily set at emirate level.

Abu Dhabi law and regulation

The regulatory policy for Electric Vehicle Charging Infrastructure in the Emirate of Abu Dhabi (the “Abu Dhabi Regulatory Policy”) was issued by the Abu Dhabi Department of Energy (“Abu Dhabi DoE”) in 2022, setting out the principles for ownership, installation and management of EV supply equipment (“EVSE”), the electricity supply to EVSE and pricing mechanisms for end customers. Multiple entities are responsible for supporting the implementation of the Abu Dhabi Regulatory Policy, including the Abu Dhabi DoE, the Department of Municipalities and Transport, the Integrated Transport Centre, the Department of Economic Development, Emirates Water and Electricity Company (“EWEC”), Abu Dhabi Distribution Company (“ADDC”), Al Ain Distribution Company (“AADC”), ADNOC Distribution and Abu Dhabi Quality and Conformity Council (“ADQCC”).

The Abu Dhabi Regulatory Policy sets out the requirements for planning of EV charging infrastructure, electricity supply to EVSE, and EV charging services to end customers. Abu Dhabi DoE does not require an operational licence or permit to own, operate EVSE and/or to provide EV charging services in public and private parking areas and for self-provision charging. EVSE owners in private parking areas or their appointed charge point operators must obtain a commercial licence from the Abu Dhabi Department of Economic Development to undertake EV Charging Services activities and obtain prior approval from the Distribution Company (a company or body holding an electricity distribution and supply licence, granted by the Abu Dhabi DoE) for connecting an EVSE.

There is a specified tariff for EV charging within Abu Dhabi and EV charging stations must be registered with ADDC or AADC. Pursuant to Abu Dhabi Law No. 20 of 2018, EWEC is the sole provider of water and electricity within an area to be determined by Abu Dhabi’s Executive Council and is responsible for ensuring the supply of water and electricity meet demands (except where a “Side Sales System” applies). Consequently, other stakeholders (including private developers) cannot sell power.

The Parking Competent Authority (the governmental department or authority that regulates public and private parking areas in Abu Dhabi) may opt to grant exclusive concessions for installation and operation of EVSEs, including provision of EV charging services in public parking areas to a charge point operator. There is an express obligation on both EVSE owners and charge point operators to adopt fair, reasonable, transparent and non-discriminatory pricing for EV charging services.

"The sale of electricity from EV charging stations is governed by a specified tariff and implemented by DEWA."

The Abu Dhabi Regulatory Policy defines an EV as: “any vehicle propelled by an electric motor drawing current from a rechargeable storage battery or from other portable electricity storage devices (portable batteries rechargeable using energy from a source off the vehicle, such as a residential or public electricity service), which is manufactured primarily for use on public streets, roads or highways, such as battery electric vehicles and plug-in hybrid vehicles.” Under the policy, EVs do not include electric bikes, scooters, golf buggies, and similar vehicles.

In addition to the Abu Dhabi Regulatory Policy, ADQCC has issued specific requirements for EVSE, enabling manufacturers, suppliers and distributors of EVSE to obtain either product certification or product registration, in accordance with specified safety, quality and performance standards.

Dubai law and regulation

In 2016, Dubai established an annual target of 10% of government procurement to be electric or hybrid vehicles and aims to achieve 30% by 2030.

The Dubai Supreme Council of Energy issued a directive in 2017 regarding the Establishment and Installation of Electric Vehicle Charging Stations in Dubai, requiring all public and private organisations and developers to obtain approvals from Dubai Electricity and Water Authority (“DEWA”) prior to establishing, installing, operating or maintaining EV charging stations. DEWA, together with Dubai Municipality and the RTA, is responsible for ensuring EV charging stations meet the technical requirements and standards adopted by the relevant authorities. The sale of electricity from EV charging stations is governed by a specified tariff and implemented by DEWA. In accordance with Dubai Law No. 1 of 1992, DEWA is the sole offtaker in the emirate (as in Abu Dhabi, other stakeholders cannot sell power).

The Dubai Building Code sets out the requirements for EV charging points regarding design and installation, the requirements for circuits, sockets and connectors, insulation, switching and protection, labelling and operation of EVSEs.

Further, in accordance with the Dubai Green Building Regulations and Specifications, all new buildings, other than villas, with over 20 parking spaces, must provide designated preferred parking for a combination of low-emitting, fuel-efficient and carpool vehicles for at least 5% of the total vehicle parking spaces required for the building by Dubai Municipality Building Regulations, Administrative Resolution No. 125-2001.

KSA

KSA is an emerging EV market and one of the biggest car markets in the region, accounting for more than 50% of car sales in the Gulf Co-operation Council countries.² The government is investing heavily in building EV charging infrastructure across the country, all in accordance with KSA’s Vision 2030 of economic, social and cultural diversification. KSA is currently ranked 23^rd in the GEMRIX 2023.

"KSA has also made several high-profile investments through its sovereign wealth fund, the Public Investment Fund."

There are multiple incentives and initiatives to promote the EV sector in KSA. For example, in 2020, the Ministry of Municipal Rural Affairs and Housing (“MOMRAH”) announced that 5% of parking spaces should be reserved for EVs and that EV charging stations should be installed in all carparks.

KSA has also made several high-profile investments through its sovereign wealth fund, the Public Investment Fund (“PIF”). In 2023, PIF and Saudi Electricity Company established a 75%/25% owned joint venture, the Electric Vehicle Infrastructure Company (“EVIQ”). EVIQ intends to install 5,000+ fast chargers by 2030 in over 1,000 locations across KSA. It also aims to promote private sector participation in the development of this network and support the localisation of research, development, and manufacturing of technologically advanced materials.

In 2022, PIF launched KSA’s first EV manufacturer, Ceer, a joint venture between PIF and Taiwan’s Foxconn, to design, manufacture and sell a range of EVs in KSA. The first EVs are expected to be available by 2025, with production aiming to achieve 150,000 cars annually. Further, PIF has invested in a majority interest in US-based Lucid, which opened its first international manufacturing facility in KSA in 2023 (also the first car manufacturing plant in KSA). In the first phase, the facility has the capacity to assemble 5,000 EVs annually, with a target of manufacturing and assembling 155,000 EVs annually once fully operational.

In 2022, the Ministry of Industry and Mineral Resources announced the development of a US$2bn EV battery metals plant to provide inputs for EV batteries. Lastly, in 2023, KSA announced a US$2.6bn commitment to invest in Vale’s base metals division, as part of its energy transition strategy.

Law and regulation KSA

The main governmental authorities regulating EV charging are the Water and Electricity Regulatory Authority (“WERA”) and MOMRAH, each of which apply separate regulations on potentially related matters.

Pursuant to the Decision of the Board of Directors of WERA No. 42/48/01 (dated 21/01/1442H.), the Regulatory Framework for the Electric Vehicle Charging Activity (the “EV Regulation”) sets out requirements for building and operating EV charging stations and equipment in KSA. A licence is not required from WERA; however, owners and operators must comply with the requirements under the EV Regulation and the regulatory and technical requirements issued by WERA from time to time. Only “Qualified Contractors” can install or operate an EV charging station or equipment.

Entities licensed to carry on electricity distribution and retail sale, or any institution associated therewith, are prohibited from engaging in EV charging activity. Owners or operators of EV charging stations and equipment are prohibited from supplying electricity to such stations or equipment through mobile electric power generation units.

"Both the UAE and KSA have EV-specific regulations to facilitate the development of EV infrastructure and use."

Distribution and retail service providers must apply the approved tariff for supplying EV charging stations and equipment according to the consumption category of the connected facility in accordance with the provisions of the Electricity Service Provision Manual. EV charging services tariffs are, however, not subject to regulation and determined by the market, subject to the applicable competition laws. Nonetheless, WERA may set an upper tariff limit for such services.

Under the EV Regulation, an EV is defined as “any vehicle powered by one or more electric motors or one or more traction motors to propel the vehicle, where the motor derives electric current from a rechargeable storage battery or other portable energy storage device (rechargeable, or using energy derived from a source outside the vehicle), that is manufactured primarily for use in streets, public roads or highways.”

Furthermore, the MOMRAH Technical Requirements (the “Technical Requirements”), set out the requirements for charging EVs. Among other things, EVSE operators must obtain approval from local electricity distributors. The Technical Requirements cover the installation of equipment, dimensions, location, spatial organisation, signage and architectural requirements. 5% of all available parking spaces specified in the Technical Requirements must be include EV charging services. Under the Technical Requirements, an EV is defined as a vehicle that “uses electricity in its engine to produce energy, propel the vehicle to movement, and store energy in the vehicles battery”. Non-plug-in hybrid EVs are expressly excluded.

The Distribution Code specifies the technical aspects of the relationship between service providers and users of the distribution system. If the EV charging stations or equipment are not connected to the distribution network, owners and operators are not required to comply with the Distribution Code.

Finally, the KSA Standards, Metrology and Quality Organisation SASO: Technical Regulations for Electric Vehicles (Regulation No. 170) set out the standards applicable to EVs.

Challenges and opportunities

The EV sector is growing at a rapid pace in the UAE and KSA, with both countries having ambitious targets and policies in place, backed up by EV-specific regulations. This rapid evolution is demonstrated by their rising GEMRIX rankings. KSA has also committed to manufacturing EVs in-country, although to reach its full potential, it will require technology transfer, availability of skilled labour and supply chain development.

Both the UAE and KSA have EV-specific regulations to facilitate the development of EV infrastructure and use. However, despite ambitious targets and committed policies, regulations in both countries are relatively new and piecemeal, involving multiple layers and stakeholders, including infrastructure owners, energy providers, regulators, licensing authorities and customers. These stakeholders must comply with EV specific legislation as well as applicable licensing and approval requirements, technical regulations, standards and codes, and requirements related to environmental, health and safety standards. There are also challenges relating to battery disposal, which require compliance with environmental, health and safety standards, posing a challenge in establishing effective and sustainable waste management practices. Navigating these complex regulatory frameworks presents a challenge for compliance and the efficient installation and operation of EV infrastructure.

Nevertheless, there are opportunities in both markets. The growing interest and demand for EVs provides a considerable opportunity for the expansion of EV infrastructure, driven by a shift towards sustainable transportation. Significantly, government initiatives and partnerships in both the UAE and KSA are creating a conducive environment for investment and development of EV infrastructure.

Balancing the challenges and opportunities will be crucial for the UAE and KSA to establish robust and sustainable EV infrastructure, supporting their broader goals of economic diversification, environmental sustainability and clean energy adoption.

NOTICE The laws referenced in this chapter are English translations of the original Arabic language laws, refer to the laws as amended and as published and in the public domain as at the date of writing. Where there is a conflict between the English translation and the original Arabic language law, the Arabic language law prevails.

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