Al Yousuf Group may have just bought the American electric vehicle maker Phoenix Motorcars but the president of the company does not believe there will be a market for them until there are subsidies to entice consumers.
Bike may spark an electric revolution
Al Yousuf Group may have just bought the American electric vehicle maker Phoenix Motorcars but the president of the Dubai-based company does not believe there will be a market for them until there are government subsidies to entice consumers. Eqbal al Yousuf said his company planned to sell Phoenix's first 150 electric pick-up trucks by the end of the year but mainly in the US where there were government cash incentives for buyers and American authorities were pushing for green vehicles to be used in the public sector.
Without the government support to reduce the cost and risk in the UAE, local consumers will be wary of spending the US$75,000 (Dh275,475) for such a pick-up, he said. "Humans get scared of anything new. We get scared of the unknown," Mr al Yousuf said. "And this technology here is unknown for a lot of people around the world. So without the government push, without the government support, even if it's cost-effective, a lot of people will not go for it."
Instead of four-wheel vehicles, Mr al Yousuf plans to sell Phoenix's electric bicycles in the UAE as early as September, before they are rolled out in any other market. The first shipment will be for 500 bikes, he said. The $800 bicycles have a maximum speed of 26kph and a range of 31km on a full charge. He said the bikes would be a more effective way to introduce the electric technology to the region.
"When they [consumers] are buying something that is unknown, they try to minimise their risk. And how you minimise your risk is by spending a lot less," Mr al Yousuf said. "Today, if I tell you to buy a car for $75,000 you would think it's a lot. But a bicycle you buy at $800, it will not take you a lot of time to think." The move comes after Al Yousuf bought the California-based electric vehicle company last December. Al Yousuf already had a 34 per cent stake in Phoenix, but after the economic downturn, available financing dried up and the US company filed for Chapter 11 bankruptcy protection in April last year, Mr al Yousuf said. His company stepped in to purchase Phoenix in full in December for about $8 million, he added, because he expected the technology to catch on in the long run.
Just months earlier, Abu Dhabi's Aabar Investments purchased a 4 per cent stake in Tesla Motors, another California-based electric vehicle company. Other Abu Dhabi investors, including a division of the Abu Dhabi Water and Electricity Authority called Al Wahada Capital Investment, own stakes in Tesla, according to regulatory filings. Al Wahada owns almost 8 per cent. But Al Yousuf's investment in the electric vehicle industry goes further back. Since 2007, the group has purchased a stake in four companies. In addition to Phoenix, it has a stake in the Nevada-based battery maker Altair Nanotechnologies, which makes the batteries used in Phoenix's trucks, the Malaysian battery maker ETI Tech, and another US electric vehicle company called ZAP, Mr al Yousef said.
He said along with these investments he hoped eventually to start building electric vehicles in the Middle East. "Unfortunately, there is no financing now," he said. He estimatedthat would require an investment of $100m and said he was looking for interested partners. Another obstacle for electric vehicle companies in the UAE is the limited range of existing models on a single charge and the fact that petrol is cheap, said VG Ramakrishnan, the director of the automotive and transport practice for South Asia and Middle East at the research consultancy Frost and Sullivan.
Phoenix's pick-up trucks have a range of about 160km on a full charge. "I think the market is not ripe in the Middle East, particularly in the UAE, for the commercial launch of electric cars," Mr Ramakrishnan said. "The cars that we have today have range issues and there is not a compelling reason to shift to zero-emission cars." He said government subsidies and support would be key to the acceptance of electric vehicles in the Emirates.
Mr al Yousuf expected local interest in the electric bicycles but finding a mass market would be tough, too, as it is seen as a less-prestigious mode of transport. But he said he was hopeful that could change. "I need to push this industry over here ? I want to make a statement," he said. "I want to make a change over here." email@example.com