EV Outlook for GCC Markets ThinkDirect Automotive Consulting October 2022About this report This report outlines the electric vehicle outlook and developments across the globe and particularly in the GCC (Gulf Cooperation Council) region. Some key topics covered in this issue are electric vehicle sales, government initiatives, OEMs plans for electrification etc. Major developments in the GCC region have also been highlighted. Although there has been a subdued demand for electric vehicles in the region, the future outlook looks more optimistic. With the increasing oil prices and the emergence of new gen. customers, the intent to purchase electric vehicles is only increasing. Also, the governments identify that there is a need for greener transportation and mass adoption of electric vehicles is the way forward. Having said that, there is still a need for a clear regulatory framework to achieve the goals. In the coming months, ThinkDirect Automotive Consulting desires to cover the entire electric vehicle value chain (Charging stations, EV components, EV service, dealerships, CX technologies etc.) in a series of reports.nkorect, EV Outlook for GCC Markets lSonsutng Contents 1. Global EV sales Pgl 2. Policies promoting EV deployment Pg3 3. Major automakers accelerate EV plans Pg 4 4. Scenario in emerging countries Pg6 5. Overview of GCC countries’ EV market Pg7 6. EV sales in the GCC markets Pg 12 7. Customer outlook on EVs Pg 13 8. EV developments across the GCC countries Pg 14 9. Challenges for EV adoption in GCC countries Pg 20 10. Key takeaways Pg 21EV Outlook for GCC Markets rhinkorect ensuing Global EV sales Oil has been a predominant energy source in the transport sector. Over the last decade momentum accelerated to deploy a range of powertrains and alternative fuels. The 2010s were ground breaking for the introduction of electric vehicles and to shape a promising nascent market. Electric vehicle benefits include zero tailpipe emissions, better efficiency than internal combustion engine (ICE) vehicles and large potential for greenhouse gases (GHG) emissions reduction when coupled with a low-carbon electricity sector. In 2011, around 55,000 electric vehicles (EVs) were sold around the world, Ten years later in 2021, that figure had grown close to 7 million vehicles. With many countries getting plugged into electrification, the global EV market has seen exponential growth over the last decade. It is estimated that the EV sales in 2022 sales will cross the 10 million mark, due to historic hikes in fuel prices since the beginning of the year. Global EV Sales till 2021 x mmm PHEV mmm EV Units in ‘000s 0.1% 0.2% 208 — 2013 125 2012 321 = 2001 Growth +127% +66% +55% +69% Source: EV Volumes tr EV Market Share +46% 2014 2015 2016 2017 2018 2019 2020 2021 +59% +659 +9% +42% +108%EV Outlook for GCC Markets EV Sales by Country China and Europe accounted for ~85% of global EV sales in 2021 Units : Million EV Share uss | 06 (9%) South Korea %@} Jo (2%) Rest of World ¥ a 03 (4%) Source: Visual Capitalist Leading EV OEMS Tesla continues to be the leader, while Chinese OEMs dominate the sales charts Tesla United States 907,000 10 Changan China 105,000 Sales are rounded-off. Includes few estimations Source: JATO Dynamicsok for GCC Markets 2. Policies promo’ The growing popularity of electric cars is not only driven by soaring gas prices worldwide but is also the result of government plans to promote green transportation options that minimize carbon emissions as much as possible, which can accelerate the fight against Climate Change. Governments around the world have introduced policies to support the transformation of the transport sector. These policies take a variety of forms: national greenhouse gas ig EV deployment (GHG) reduction targets for transport; fuel efficiency targets and carbon dioxide emission standards; EV stock and sales targets and/or mandates; financial support to consumers and manufacturers; charging infrastructure regulations and deployment support. The measures - primarily purchase subsidies, and/or vehicle purchase and registration tax rebates — were designed to reduce the price gap with conventional vehicles. EV related policies in select countries Chi EU Zero emission vehicle mandate 1) WLC LCL “ v 5 7 v oo 3 3B Fuel Economy y y y y y y : Standards ss Purchase ' v v v v v v - Subsidies @ Hardware v v v v v y - 8 standards 7 3 a Building y ms e e - y : B Regulations 5 & Fiscalincentives ¥ v v v v v - 'e policy is being implemer Outlook 2021EV Outlook for GCC Markets kers accelerate EV plans In recent years, automakers have been progressively finalizing their business strategies that consider electrification not only as a way to comply with policy regulations or respond to government incentives, but also as an opportunity to capture market share and maintain a competitive edge. This opportunity has lead to introduction of new age EV-only OEMs. Tesla has been the pioneer in the design, manufacturing, and sale of EVs. Also, BYD has now emerged as one of the stronger EV brands globally. While traditional OEMs still maintain the development of new/updated ICE powertrains, a number of PHEVs/BEVs have become a part of their production lines. All major OEMs have pledged electrification targets over the course of next decade. Looking forward, one can expect increasingly aggressive pricing and the development of a wider range of models.EV Outlook for GCC Markets Li) ensuing Electrification of major automakers ag Brand Bret 2022 BYD + Achieve 1.2 million EV sales in 2022 > Ford + Start production of F-150 Lightning Pickup ) Mercedes Benz —+_ Introduce 10 new EVs through EQ brand 2023 WwW Honda/GM + Electric SUV set to enter into production wana Renault-Nissan + 8 EVs by end of the year 2024 (fA) Acura + EV production planned in partnership with GM GED Audi + To have 20 BEVs and 10 PHEVs on sale ® Bmw "+ 16-25% of global sales from PHEV and BEVs QO Changan + To have 33 EVs in ‘the global | line-up QP Ford + Invest $29 bn in EVs through? 2025 GM + Invest $27 bn in EVs & have 30 EVs on sale @) Great wall + 80% of total sales from EVs across its brands @® tyunaai + 23 EVs on sale using the E-GMP platform om Jaguar . Target 100% electrification across the line-up GD Land Rover + To have 6 EVs on sale S SAIC + 30% of total sales from EVs @®P Toyota + To have 15 models (incl. BEV, PHEV & FCEV) @ VWGroup + Achieve total of 15 million sales across its brands © volvo + EVs to account for 50% of sales “4 Kia + TLEVs in production CO mazda + Introduce new generation platform for EVs Source: Global EV Outlook 2022, EnergyDM Management <>ok for GCC Markets emerg Electric cars have not met similar success in all regions. China, Europe and the United States account for nearly two-thirds of the overall electric car market and their aggregated sales represented 95% of total electric car sales in 2021. In large economies such as Brazil, India and Indonesia, EVs account for less than 0.5% of total sales, with some growth over the last years, albeit from low sales levels. The major hurdle in these countries have been limited number of models and the high price. For instance by end of 2021, there were less than 20 models available throughout Africa, and less than 40 in emerging Asian markets. In comparison, China offered nearly 300 models while Europe had nearly 184 models. Available models tend to be larger or more expensive ones in the emerging markets. For many years, major EV markets such as China, Europe and United States also have been dominated by high-end models, before car manufacturers could offer less expensive, mass- market options. Even though some ng countries small electric vehicle models are now available, prices remain too high for mass-market consumers in the emerging markets. As a result, mostly consumers from high income groups are able to purchase EVs, thereby limiting mass-market adoption. The lack of widely accessible charging infrastructure and weaker regulatory push also contribute to slower market uptake in emerging markets and developing economies. Is command ~95% of share in India.CC Markets The abundance of oil in GCC has resulted in a subdued growth of EV sales in the region. Although oil still constitutes the main source of national revenue and domestic fuel of all Arabian Gulf countries, new renewable energy and clean transportation technologies, economic and energy diversification, concerns about pollution and climate change, and support for sustainable growth are now driving the new economic agenda of some of the GCC countries. In the last couple of years interest in eco-friendly alternatives to the internal combustion engine vehicle is slowly growing in the region. In particular, the United Arab Emirates (UAE) and Saudi Arabia are becoming early adopters of electric vehicles in the Arabian Gulf. And even though it is still cheaper in both countries to drive an internal- combustion engine vehicle than EVs, their efforts are encouraging.tlook for GCC Markets Among all the countries in GCC, UAE has been the first adopter of electric vehicles. Dubai's EV Green Charger initiative was launched in 2015 to increase the number of charging stations. As in 2022, more than 750 charging stations have been set up across Dubai. Global EV leader Tesla announced its entry into UAE in 2017. The Emirate of Dubai was the first in the UAE to add 200 Tesla EVs to its Taxis in 2017. A number of electric car brands operate in the UAE today. EV users in Dubai enjoy a range of incentives ed its first retai bai's Sheikh Zay and benefits, such as free charging stations until 2022, bonus warranty for EVs, discounted car registration and renewal, free parking in certain areas, toll exemptions, etc. The authorities in the UAE have also provided incentives and a range of EV choices for local businesses to begin using EVs. GLOBAL ELECTRIC MOBILITY READINESS INDEX WiMacro © EVmarket/landscape Ml Customer EV readiness Mi Public charginginfrastructure TCO & regulation Global benchmark Ambitious followers Emerging StartersEV Outlook for G C Markets While Saudi Arabia trails behind the UAE in adopting electric cars, EVs are slowly gaining traction in the kingdom. Although the EV market in the kingdom is still small, Saudi investments in EV manufacturers abroad have been considerable. The Public Investment Fund (PIF) - Saudi sovereign wealth fund has invested $1.3 billion for 63% share in California-based EV startup Lucid Motors in 2018. Today, Lucid has Governments in the GCC region are now more committed than ever in moving towards carbon neutrality and sustainable transportation. GCC countries, notably the United Arab Emirates (UAE), Saudi Arabia, and Bahrain, have announced commitments to net-zero carbon emissions. To achieve net zero, governments would need to ensure that any carbon dioxide released into the atmosphere from domestic corporate activities is offset by an equivalent amount being removed. started the construction of its manufacturing facility in Saudi Arabia. Saudi Arabia has adopted a systematic approach of establishing the infrastructure before providing clearance for sale of EVs. Players like SASCO, Electromin, etc. have started establishing their charging network across the country. TRIVIA er in Riyadh installed at the city's airport road in August 2019. This was installed , 1 commercial EV cl by Saudi Automotive Services Co "SASCO", Saudi public shareholding company EVs are expected to play one of maior roles in decarbonizing the region's transport infrastructure. GCC countries’ net zero commitment Country eon Target GS ue Yes 2050 @ saudiarabia Yes 2060 DP vanrain Yes 2060 @& oman Considering 2050 Kuwait No : c > Qatar Source: utilities-me.com No -nkorect, EV Outlook for GCC Markets lSonsutng NOTABLE ELECTRIFICATION TARGETS NES Pe CEM Ra A ese a Reem aa Wy = UAE wants 42,000 EVs on its roads by 2030. [oO ere CMT Reoraaan ual es aeceo Rega Oe Loa MA elas clas by selected government bodies will be electric or hybrid cars, as part of its rerreaN ol tA ITN POLO OOM Miro ane ete Marae The directive increases the annual government procurement target for EVs FIRM AC-lale ech OP OL Rett h tela OPM aR Ua ta geen) 30% starting from 2030. [oY Telco Naser eNO Oa RON Ea Niat WEY Nate electrification in Dubai. SAUDI ARABIA: The Kingdom expects to buy up to 100,000 electric vehicles from Lucid WVercole Nolte MORI l-igiole} Pa Se ond Uru neg ee Rome Rati Mian hele cikein Riyadh, run on electricity by 2030. QATAR: CeCe nar a ake tease ona tim icone ola ack scaie by 2022 and reach 100% compliance by 2030. + Aims to install over 600 charging stations to support electric buses in advance of the 2022 FIFA World Cup. KUWAIT: Faye aol stants otal code MAN OY Ta oN E A Aaa tate eae0 providing logistic services to big global EV manufacturing companies.EV Outlook for GCC Markets As the GCC countries’ accelerate thier efforts to diversify away from oil and achieve net-zero carbon emissions, it is becoming an increasingly important centre for the development of smart cities that harness the power of digital and green technologies to enhance livability and remove obstacles to quality of life, such as air pollution, traffic congestion and inadequate public services. The transformation of transport is one of the key pillars of smart city development, which is giving rise to a wave of innovation related to smart and green mobility options. With clean air and green spaces at the heart of many smart city visions, EVs and AVs will have an Smart city EV ecosystem Cee seein] important role to play in meeting both the objectives of urban planners and the aspirations of citizens, developers, embracing greener alternatives and future mobility solutions such as EVs to help them achieve their future net- zero targets lanned or ongoing smart cities in the GCC countries + NEOM + Amaala + Qiddiy + Red Sei Madinat A I + South Saad Al Abdullah * Lusail City + Masdar City + Zayd Smart City (Both Cities in Abu D! Source: Gearing Up for the Green Automotive Transition | ESG Intelligence NThe demand for EVs have been steadily increasing in the GCC markets. Many carmakers like Mercedes Benz, Audi, Renault, GM, Hyundai , MG have all expanded their EV offerings to the GCC markets, predominantly in UAE. However with increasing interest for EVs many OEMs are planning to introduce their global products in the region Some of the electric cars available on sale in the UAE include Tesla Model S/X/3, Chevrolet Bolt EV, Audi e-tron, Mercedes Benz EQC, Renault ZOE, Hyundai Kona, MG ZS EV ete. (Note: Not all carmakers are reporting the exact sales data) One of the major challenges has been unofficial imports of a number of EV models in UAE. Also, there have various reports that some car dealers are offering these models to the customers at very low prices. This has been a hot topic of discussion among car buyers and as per reports, there are a good number of EVs on road. VW and Audi have already issued official statements against these unauthorized imports.EV Outlook for GCC Markets rhinkorect ensuing Customer outlook on EVs The emergence of new gen. customers and the increasing awareness about the benefits of electric vehicles and soaring oil prices is likely to increase consumer preference for EVs. Talkwalker, which a leading consumer intelligence platform, tracks conversations on blogs, social media, videos, audio, forums, and reviews sites in six countries — KSA, UAE, Bahrain, Qatar, Kuwait and Oman — reports a positive trend around EVs in the GCC region over the last year. The region’s younger generation's growing environmental consciousness is reflected in online conversations surrounding EVs in the GCC countries. Online mentions about EV across the GCC countries Source: Talkwalker | Arab News According to a poll conducted by Audi Abu Dhabi, 52% of UAE residents are planning to buy hybrid or EV as a result of rising gasoline prices, while 25% are waiting for more EV alternatives before making a decision. EVs have been a hot topic on GCC social Media Online conversations related to electric vehicles ‘Social media mentions SK 4K 3K 9 Mar. 2021 25 Jul. 2021 Source: Talkwalker | Arab News 18 Oct. 2021 10 van. 2022 4 Apr. 2022Many players and developers are embracing greener alternatives and future mobility solutions such as EVs and charging stations to help the governments achieve their future net-zero targets. Many of them are entering strategic partnerships and actively readying their EV implementation strategies. A lot of activity is going on behind scenes. One can except a flurry of public announcements soonitlook for GCC Markets Recent EV developments - UAE (1/2) M Glory Holding Group has opened new electric vehicle manufacturing plant in Dubai Industrial City. The Dh15 billion facility at Dubai Industrial City - which will have a total land area of 93,000 square metres and aims to make 55,000 EVs a year. The Al Damani DMV300, M Glory's first fully-electric car, will be manufactured at its new plant in Dubai Industrial City. Al-Futtaim Automotive, one of the UAE's main vehicle distributors, teamed up with Swedish premium electric car brand Polestar to launch sales of its electric vehicles in the country. The first Polestar retail store - ‘Store of the Future’ has opened at Mall of the Emirates, Dubai ARK MOTORS. SR eon! ARK MOTORS was established by Sheikh Mohamed Bin Ahmed Bin Hamdan Al Nahyan, the ruler of the UAE and the presidential family of Nahyan Company plans to launch EVs from 2023. A grand launch event has been planned on November 1- 2, 2022 in Dubai.(roliog Lym Séira ( ) Dubai Electricitya Water Authority UAE's Ministry of Energy and Infrastructure has signed an agreement with Siemens to install ultra-fast EV chargers on the highways in Ras Al Khaimah, Ajman, Umm Al Quwain & Fujairah, Dewa's charging network has increased to 325 stations, equivalent to more than 560 charge points. Emirati sovereign wealth fund Mubadala ~~ Investment Company signed an MoU with the French energy company ENGIE. — a Bs éncie As per the agreement, Mubadala and ENGIE will work to develop a “digital xe platform" for charging electric vehicles ~ isis oe N in Abu Dhabi - Electric vehicle car-sharing platform, MOTOR, has announced its launch in the UAE with a mission to provide users with leading electric vehicles in the market at an affordable price Tet ory MOTOR aims to scale its fleet to 200 cars by the end of 2022, and launch its platform in other GCC countries by end of 2023.itlook for GCC Markets a wom Lucid Motors has started the construction of its EV factory in King Abdullah Economic City. Installed capacity will be 155,000 EVs. It is expected to be completed by 2025. The Saudi government has signed an agreement to buy up to 100,000 EVs over 10 years. Until then, Lucid Air (electric sedan) will be delivered to Saudi Arabia from USA, with order numbers initially ranging from 1,000 to 2,000 annually. Electromin, a division of Petromin Electromin and Schneider Electric have signed an agreement for creating an integrated EV ecosystem 100 strategic locations. and drive growth of a range of The chargers were set up in technologies in EV sector. collaboration with ABB E-mobility. Corporation, has installed a nationwide charging network atEV Outlook for GCC Markets Recent EV developments - Saudi Arabia (2/2) aalbIl 8jljg STRATEGIC PARTNERSHIP san Fenny | Seipeder The infrastructure team for EV charging, led by the Ministry of Energy, has completed all the legal framework for the rollout of EV Schneider Electric and GREENER by charging stations, IHCC have signed a partnership agreement to tap into the need for e-Mobility and EV charging across Saudi Arabia. 4 o + 0 Total Energies and Altaaga will work together under the “Altaaqa EV" brand heme ts orrerendttorend “Al Sharif X",, a subsidiary of Al Sharif comprehensive solutions for the Group Holding, signed an development of charging agreement with “Petroly” to install infrastructure for electric vehicles. EV chargers at its petrol-stations. A first of a kind conference to discuss about AUTO io1-o3Nnoveoze the development, challenges and SHOW 9 piycsh.sousisrctia opportunities to promote the EV Charging infrastructure in the KSAEV Outlook for GCC Markets Recent EV developments - Other GCC Countries Bahrain atar Bahrain National Insurance — Qatar General Electricity and Mowe (8N)) introduces the first Water Corporation (Kahramaa) bni & xt insurance policy specifically _ has completed the installation for EVs. The new product of 30 fast charging stations in Urol 46 EL4yyb includes coverage for the country. Aims to expand Your Insurance Partner damage, fire, theft, battery | the network to 600 to 1,000 and charging cables. fast charging stations by 2025. ems Gilg Alg Qilay ay Behbehani Brothers... Behbehani Brothers W.LL are in the final stage of achieving homologation under BH 1:2021 Bahraini Technical Regulation for Electric Vehicles. Currently this homologation will extend to the Porsche and Audi EVs. Kuwait The final regulation for electric vehicle chargers in Kuwait has. been approved by the Ministry of Public Works and Ministry of Electricity, Water and Renewable Energy. Qman Oman has launched the first model of its electric car, as part of its ambition to become a significant _ player in the electric vehicle (EV) sector globally, The electric car is produced by Mays Motors, a MAYS p yey company funded by the Oman Technology Fund. Cs)EV Outlook for GCC Markets 9. Challenges for EV adoption As desirable as the viability of EVs in the GCC markets may be, it is not without its challenges. GCC countries are behind the curve compared to the developed economies in terms of policies and incentives for demand generation of EVs. The region still needs to put in place the necessary infrastructure before widespread private and public EV adoption becomes a reality. One of the main gaps exists in the regulatory framework, both at the central and local authority levels. EV rollout is still in its initial stages. Regulatory frameworks needs to be updated to streamline certification processes and encourage supply TI he GCC coun from more EV providers. The significantly higher upfront cost of owning an EV compared with an ICE car remains a challenge for a faster adoption of EVs especially in the price-sensitive markets. The region's hot climate might adversely affect the longevity of battery life in EVs. This is expected to influence the warranty and aftersales plans of the carmakers. The global supply chain issues regarding the semiconductors and the supply of battery metals is already a major challenge for carmakers. This disruption in supply chain might impact the product launch and pricing strategies.EV Outlook for GCC Markets KEY TAKEAWAYS BU Mele toate Rw Lie Mere ah Reel Ce transportation is the cornerstone of the government's Pre larlNAU EU Mu ele) lta Rel a lece Raley Pe Mcrae With carmakers expanding their global portfolio with EVs, Sa Meteo eR tract RRC eRe ac lale | Rela le de ld Aalto MLM elo With the emergence of new gen. and increasing Bree el iN oe enn kl prices, the customers look decisive towards the purchase The regulatory framework needs to be updated and the required infrastructure still needs to be put in place for WICC RCS ae (Tee adrhinkorect ensuing EV Outlook for GCC Markets Do you want to gain further insights / add an EV brand to your portfolio? Our Automotive-focused boutique firm is led by highly experienced industry professionals who have previously headed reputable organisations in the region. We help our clients make far-reaching decisions in the GCC countries’ automotive business environment that is ready for a disruptive change. Our services include Strategy Consulting, Brand Acquisition, Primary Research & Insights, M&A Transactions, Digital Transformation etc. Please feel free to contact us: TDAC@thinkc.me Zubair A Sobani M Amir Khurshid Director Chief Executive Officer Email : zubair@thinke.me Email :amir@thinkc.me Phone : +966 50 636 9046, Phone : +966 50 664 8151 i +971 52 559 2965 Liu Jun Pankaj Joshi Director, Director, China Operations , Oman Operations b ‘hi Yashwant T Abhilash K Senior Associate Associate 22et Terr) folie OLA TT keca cae) eee ec Tel a) ThinkDirect TD Ooh Consulting rN Shams, Sharjah Media City, P.O. Box 515000, SCC Mea erro Sa Corry Beet eon atom ree CT ory