Introduction

The Middle East’s electric vehicle (EV) market is in its early stages but could grow to $54 billion by 2035. By then, EVs might represent nearly two-thirds of overall new car sales in the region. Both public and private sectors are working to build a robust EV ecosystem, pushing the Middle East toward a transformative EV journey. By focusing on consumer needs, the region can accelerate EV adoption and become a leader in sustainable mobility.

However, realizing this potential requires decisive action now. Governments should implement favorable policies to drive adoption, while businesses that move early can seize the opportunity to establish a strong brand, secure prime locations for charging stations, and attract the most valuable EV customers.

The market-size numbers presented in this article include battery electric vehicles (BEVs), plug-in hybrid EVs, and fuel cell EVs. The survey results on the key purchasing criteria (KPCs) assessment include only BEV assessment.

The global EV landscape

The global electric car fleet continues to grow strong. By 2035, EVs could make up more than 65% of new car sales, driving the market to $2.3 trillion by 2035. However, EV adoption rates and direction vary significantly worldwide. China, Europe, and the US show different growth trajectories based on customer acceptance, product offering, and government incentives. The following archetypes can be observed:

Rapid penetration: China leads the EV market, boosting its EV penetration rate from 6% to more than 30% in four years (2020 to 2023). This growth has been primarily fueled by aggressive national policies and EV adoption targets, substantial government incentives, a rapidly growing charging infrastructure, and a wide range of available EV models.

Steady replacement: The European Union (EU) follows China closely, with more than 20% EV penetration in new car sales. The EU’s EV adoption progress moves in waves, driven by government decisions about the upcoming 2035 gas-powered car ban, targeted subsidies, tax incentives, and benefits for EV buyers, though some discrepancies exist among EU countries. While a temporary slowdown can be observed, the midterm trajectory remains strong, with regulatory frameworks and incentives continuing to support long-term EV growth.

Niche choices: The US shows more selective adoption patterns. Unevenly distributed charging infrastructure and a limited offering of mid-range and affordable EV options have led to lower overall EV adoption compared to China and the EU. In 2023, EVs comprised less than 10% of new car sales, mainly in high-performance and luxury market segments. However, EV adoption in the US varies significantly by region, with states like California leading the way due to extensive charging networks and supportive policies, while adoption remains lower in regions such as the Midwest, where infrastructure and incentives are less developed.

The overall outlook for the global EV market is positive (see Figure 1). However, the trajectory and penetration levels may fluctuate depending on future government policies and regulatory decisions in a wave of EV policy updates.

Figure 1

Current state of EV adoption in the Middle East and its key drivers

EV adoption in the Middle East is still in its early stages. The United Arab Emirates (UAE) leads with a 3% EV penetration of new car sales, while other countries in the region are still below 1%. This shows both the challenges and significant opportunities ahead for the Middle East. Notably, between 20% and 35% of survey respondents across Middle Eastern countries are considering a BEV for their next vehicle purchase, underscoring the growing relevance of this topic for consumers and the potential for rapid market growth.

Bain & Company recently launched a consumer study to map the key EV adoption drivers from Middle East buyers’ perspectives. Consumers recognize several KPCs, which can be categorized into four main pillars: product offering, total cost of ownership, technology, and infrastructure(see Figure 2).

Figure 2

Understanding the differences between customer perception and reality across the top KPCs provides helpful insights into needed efforts to further drive EV adoption in the region.

KPCs that meet customer expectations

Battery life and warranty: This tops the list of KPCs for EV buyers. More than 70% of respondents view EV manufacturers’ offerings favorably. Leading brands offer up to eight-year battery warranties, which drives this positive sentiment.

Running costs: Most Middle East consumers anticipate more than 40% savings on running costs when transitioning to EVs. Current market offerings meet or exceed these expectations, providing up to 65% savings, even in Gulf countries that enjoy subsidized fuel prices.

Driving range: While range anxiety is still a major customer concern, EV models available in the Middle East effectively meet customer expectations. They offer driving ranges of 400 kilometers to more than 600 kilometers.

KPCs that don’t fully meet customer expectations and preferences

Purchase price: Purchase price is one of the top KPCs for buyers, but it shows a significant gap vs. customer expectations. Half of the respondents aren’t willing to pay more for an EV than an internal combustion engine (ICE) vehicle, while most EV models today are more expensive than equivalent ICE models (see Figure 3). Closing the pricing gap is crucial. While battery prices are expected to fall as production scales up and new technologies emerge, helping to achieve price parity, this transition is unlikely to happen quickly enough without regulatory intervention. Many regulators believe they need to drive the change through laws such as CO2 fleet emission targets or incentives like BEV purchase subsidies.

Figure 3

Model variety: The current vehicle class and body type for EV offerings aren’t aligned with customer preferences and market dynamics. For instance, almost 40% of Middle East consumers prefer legacy mass manufacturers; however, the EV market is currently dominated by premium and luxury brands (see Figure 4). There is also a significant gap in the availability of BEV models. The number of BEV options on the market remains limited overall, and this is particularly pronounced when it comes to SUVs, which are the preferred body type for most respondents.

Figure 4

Charging infrastructure: Customers recognize that a critical enabler for widespread EV adoption is the need to boost the EV charging infrastructure. Almost half of the respondents would prefer charging at public stations (varying by country), and most respondents assess their availability from low to moderate. The region has room to accelerate EV charging infrastructure—in 2023, there were fewer than 0.1 charging stations per 1,000 inhabitants vs. 1.6 in China (see Figure 5).

Figure 5

This preference for public charging stations is largely driven by consumers’ expectations that EV infrastructure should mirror the ubiquity of petrol stations for ICE vehicles. However, when factoring in the cost, preferences shift significantly. Charging at home, especially with solar-generated electricity, is generally more affordable than using public charging stations. As a result, in most established markets like Europe, BEV drivers tend to prefer charging at home or at work if available, with public stations seen as a secondary option for convenience, notably for longer trips.

Strategic initiatives to boost EV adoption

Addressing these gaps with targeted initiatives is crucial to driving EV adoption growth and requires coordinated efforts from both the public and private sectors.

Government-led initiatives

Governments can trigger EV adoption to meet their environmental commitments and ensure markets are ready for full-scale adoption through the following:

Regulatory measures: Focus on encouraging EV adoption by making the transition smoother and more appealing for consumers. Governments could incentivize employers to install free charging facilities for employees, offer free or subsidized parking for BEVs in city centers, and reserve dedicated lanes on highways for electric vehicles. Other creative measures include offering subsidized or free EV car-sharing programs in urban areas, as well as electrifying government fleets. These initiatives not only support the shift to EVs but also enhance the overall attractiveness of sustainable mobility options without directly penalizing ICE vehicles.

Incentives and subsidies: Make EVs more affordable and competitive by offering cash subsidies and incentives, such as reduced registration fees, decreased EV import tariffs, and free parking for EVs. These initiatives will make EV ownership more convenient and attractive, helping to accelerate widespread adoption.

Charging infrastructure: Act as a catalyst to accelerate the EV charging infrastructure. This can be done by providing grants for fast charger installation, subsidizing grid connection costs for charging parks, providing incentives for home chargers, and more. The main benefit of this is to alleviate range anxiety among potential buyers.

OEM and dealership-led initiatives

Many dealerships are skeptical about the viability of their EV-era business models. They expect lower revenues from service and parts, which currently contribute 40% to 60% of the dealership profit pool. On the other hand, they can tap into new profit pools by driving customer interest in EVs.

Expand product portfolio: Offer more EV SUV models and cater to various price segments. In the short term, introduce plug-in hybrid EVs to mitigate range anxiety and help customers transition to fully electric vehicles.

Offer test drives or short-term rental/lease options: Consumers need firsthand experience with BEVs to fully appreciate their benefits. Providing test drives or short-term rental and lease options allows potential buyers to familiarize themselves with the performance and advantages of electric vehicles. In the EU, this approach has significantly increased long-term adoption, making it a key strategy for OEMs and dealerships to boost EV uptake.

Offer innovative financial solutions: Provide flexible leasing options, implement trade-in programs to replace older ICE vehicles with new EVs, and offer buy-back guarantees to address concerns about value loss and boost consumer confidence.

Engage in infrastructure development projects: Secure prime locations for charging stations, particularly at supermarkets, shopping malls, and fast-food restaurants, which are ideal for destination charging. These venues can play a critical role in making charging more accessible and convenient. Partnerships between OEMs, dealerships, businesses, and government entities will be key to establishing a strong presence in the growing EV ecosystem. Infrastructure development can follow one of three strategic approaches: a bold “go all-in” approach (the Tesla model) with large upfront investments in a dedicated charging network; a “cautious entry” strategy starting with a few stations to test the market; or a “fast follower” approach, scaling rapidly once demand increases to minimize the risk of premature investment.

Understanding the customer base is key to meeting needs

Our assessment of potential EV customers yielded three primary buyer personas:

EV enthusiasts (~20% of total respondents): Highly motivated to purchase EVs due to their

interest in cutting-edge technology and their strong environmental values. They understand EV technology well and are aware of the latest developments.

EV explorers (~50% of total respondents): Curious and open-minded about EVs, they recognize the potential benefits but may have reservations due to factors like cost, charging infrastructure, and range anxiety. These customers are in the research phase, gathering information and weighing the pros and cons.

EV skeptics (~30% of total respondents): Hesitant and doubtful about the viability of EVs, they’re concerned about high initial costs, limited charging infrastructure, and perceived inconvenience compared to conventional fuel vehicles. They may strongly prefer ICE and require significant evidence and incentives to consider EVs.

EV enthusiasts are a key segment to target. They are:

• Younger on average and have a higher income—more than two-thirds of EV enthusiasts are 25 to 44 years old, and more than 45% of them have high incomes.
• Committed to buying EVs—enthusiasts are six times more likely to buy EVs compared to skeptics.
• Willing to pay more for an EV—all the EV enthusiasts are willing to pay a premium for an EV.

Our analysis shows enthusiasts focus on certain criteria when considering buying an EV. Addressing these criteria through targeted initiatives will help secure their commitment:

• 65% of enthusiasts prefer to buy an EV from legacy mass manufacturers or EV pure play brands—expanding legacy mass manufacturer dealerships in the Middle East would drive adoption.
• More than 50% of enthusiasts prefer buying an SUV EV over other car body types.
• Almost 90% of enthusiasts prefer charging their EVs at home or at their destination (e.g., work, shopping malls, restaurants) rather than charging during their journeys. To align with this preference and accelerate EV adoption in the Middle East, initiatives supporting home charging installations (through government incentives or OEM-sponsored programs) can be highly impactful. Additionally, expanding charging infrastructure at key destinations across sectors like retail, hospitality, and workplaces will cater to consumer needs and further drive the transition to electric vehicles.

Conclusion

The Middle East is at a pivotal moment to capitalize on the emerging EV market. With the potential to reach up to 64% EV penetration in new vehicle sales by 2035 (see Figure 6), the opportunities for regulators, OEMs, dealers, and investors are significant. However, capturing these opportunities requires a smart, forward-thinking strategy. Stakeholders must develop a clear view of future scenarios and strike a balance between moving quickly to secure first-mover advantages and making strategic, calculated investments to avoid premature spending.

Figure 6

To succeed in this nascent market, stakeholders need a comprehensive approach that aligns with evolving consumer needs, regulatory frameworks, and technological advancements.