You might have noticed a monumental regime change in one of the most politically and economically powerful nations on the planet. In the first week of the new occupant of the famed Oval Office, a slew of ‘Executive Orders’ has seen America withdraw from the Paris Agreement on Climate Change, scrap commitments to an electric vehicle mandate, and embrace the motto: “Drill, baby, drill!” – extracting oil and gas until the earth runs dry.
And then there’s the matter of “tariffs” – described by the new US Commander-in-Chief as “the most beautiful word in the dictionary,” but more accurately explained as a fine on one’s own people for importing foreign goods. Even before the switch in the White House, the US had declared 100% tariffs on Chinese electric vehicles, a throwback to previously spurious protectionist policies. Expect these to tighten further as the new administration urges US carmakers to “build the cars consumers want at a rate nobody could have dreamt possible just a few years ago.”
On the face of it, this seems like good news for American motorists – especially “petrolheads” mourning the loss of mighty V8 engines. But here’s the thing: America’s lumbering legacy car industry cannot pivot from over a decade of slow, costly, and begrudging transition to electrification, so quickly.
Plus, this will likely leave it languishing so far behind the global move to modernising mobility, that it may never recover, much less catch up, after a term (or two?) of Republican revulsion at plug-in cars. Of course, car companies are well aware of that, and you may well hear them revving their beefy five-point-ohs in celebration outside the factory gates while continuing to R&D the heck out of electrification behind closed doors.
The real question, however, is what does this shift in policy in Uncle Sam’s land mean for the rest of the world, and specifically us in the Middle East? Well leaving aside discussion of the significant set-back to saving the climate so we fragile humans can continue to inhabit this blue marble (and not have to migrate to Mars aboard SpaceX starships), when it comes to cars, motoring and the transition to electrification… well actually it could be happy days!
The Floodgates Are Opening
While the US imposes sky-high tariffs, Europe isn’t far behind, slapping a 35% surcharge on Chinese EVs. Meanwhile, China’s car industry – having reached saturation at home – has been busy buying up extra ships to ramp up exports.
Last year, at nearly six million cars, China surpassed all others to become the biggest exporter in the world. And as demand for EVs grew, it led the charge by a long, long way, accounting for 70% of all electrified cars sold globally.
Apart from the UK, which has not yet imposed any tariffs on Chinese cars, Asian and Middle East markets remain open to imports and thus may just find themselves in pole position to benefit. The likes of BYD, Geely, GWM, Nio, Xpeng and others could send a flood of EVs to the UAE and Saudi Arabia and thereby drive down prices while fast-tracking green mobility in the region!
Cars waiting to be exported from China.
Why the Middle East Makes Sense
China’s vehicle exports are expected to grow 5.8% to 6.2 million units this year (slowing from a 19.3% increase in 2024). But with the restrictions in the States, those extra cars have to go somewhere. This glut of unsold vehicles needs a new home, and the Middle East – with its minimal trade barriers, growing EV demand, and ambitious sustainability goals – could emerge as an attractive destination. But what does that mean for buyers in the UAE and KSA?
Both GCC countries have been steering hard towards green mobility. The UAE’s EV market is booming, with over 28,000 EVs on its roads as of 2023, and Dubai alone plans to reach 42,000 EVs by 2030 under its Green Mobility Strategy. Similarly, KSA’s Vision 2030 aims to position the kingdom as a leader in renewable energy and EV adoption, including local manufacturing initiatives like the Lucid Motors factory in Jeddah.
With total car sales in the UAE reaching 275,710 units in 2023 and KSA clocking a robust 729,466 units, these nations are fertile ground for Chinese EV manufacturers. Adding surplus stock into the equation could mean a wave of affordable, high-quality EVs hitting showrooms, challenging established players like Tesla, BMW, and Mercedes.
Keen Pricing is King
Chinese automakers are already known for aggressive pricing, offering EVs packed with features at a fraction of the cost of their Western rivals. The influx of extra stock could force prices to drop even further to offload inventory quickly resulting in more affordable options for budget-conscious buyers and making EVs accessible to a wider audience. The increased competition could force Tesla and European brands to lower their prices to compete, and all of this could facilitate the region to hit its sustainability targets faster, not just aligning with global climate action efforts but actually becoming a leader.
However, challenges remain. Brand perception and durability are key concerns in a region where scorching heat and sandy conditions test vehicles like nowhere else. Japanese and German brands have earned loyalty for their reliability, and Chinese automakers will need to prove their robustness. Expats, too, may worry about resale depreciation of Chinese EVs. Additionally, an oversupply of vehicles risks destabilising the market.
Nonetheless, America’s move away from electrification, could be a major win for the Middle East. As Chinese EVs pour into the region, they may not only make affordable electric cars a reality but also position the Middle East as a leader in green mobility. For buyers, it could mean more choices, lower prices, and quicker access to the future of motoring. Affordable electric cars could soon be driving us not just to sustainability, but to the future.
