Soaring oil prices and fear of a possible ‘Carbon Judgment Day’ have pushed car makers and governments the world over to steer the automotive industry towards carbon efficient vehicles. The Middle East is, however, no California. Unlike their American counterparts who proudly boast their PZEVs (Partial Zero Emissions Vehicle) Arab movie stars tend to favor more traditional ways of transport.
PZEVs are vehicles equipped with engines that control carbon emission by increasing fuel mileage. Although PZEV, also known as Hybrid Electric Vehicles (HEV), run on gasoline, they also offer extremely clean emissions. Among the cars falling into the category is the Honda Civic Hybrid. In 2007, about 500,000 HEV were sold worldwide according to the website Marklines. In the US, sales of hybrids in January 2008 climbed 27.3% to 22,392 units, according to the website Green Car Congress, and this figure even excludes sales by GM.
Variety on the market
PZEV models are already offered by Toyota, Ford, Honda, GM, Subaru, Volvo and Volkswagen. Much of the time they feature similar models to ones we may be familiar with whether the Honda Civic or the four-by-four Lexus.
The green car fashion, although far from turning into a generalized frenzy in spite of high oil prices, has certainly been gaining momentum. Tesla Motors, the maker of the Tesla roadster electric sports car recently declared it had plans to raise $250 million in the next two years through debt financing and an IPO to bring its second model to the market. Hybrid car makers are also determined to structure a viable supply chain, reported The Times of London, noting that Think Global had signed a deal with Enova Systems to provide at least 1,000 power-control units for its small Think City electric car this year.
Traditional car manufacturers are also joining the fray by competing with new, state of the art models. As an example, Toyota plans to develop mass market cars powered by bio-fuels as well as plug-in electric batteries. To achieve its ambitious goal it has joined forces with Panasonic to expand production of lithium ion batteries to meet demand for a plug-in hybrid vehicle available in 2010, the car maker announced in June 2008.
Getting to the green
To catch up with the green fever, proper infrastructure will have to be put in place meeting certain standards including recharging electrical stations as well as hydrogen fuel stations.
Luxury cars are turning to green technology to respond to the trend and tap into the segment of high net worth individuals. Lexus was one of the first to hop on the bandwagon. Its four-by-four model is already available in the region, in Cyprus. Other luxury car makers have followed suit with BMW launching its BMW 7 Hybrid series last year.
Emerging markets are following suit. Three years ago Toyota started building its successful hybrid Prius in China in a partnership with FAW, China’s biggest car maker. FAW-Toyota announced that in 2008 it would be selling more than 1,000 cars in China, up from 400 in 2007.
Governments also seem to be upping up the ante. Europe’s carmakers are to ask the European Commission to lend the industry some 40 billion euros to support their efforts in producing more environmentally friendly vehicles, the Financial Times reported in October.
In the Middle East, the world’s prime oil producer, countries are trying to curb oil consumption of vehicles and implement alternative fuel schemes. Green Car Congress reported that government and private organizations in Egypt, Iran, United Arab Emirates and other oil-rich nations are implementing programs designed to reduce consumption of gasoline and diesel with natural gas vehicles. According to the International Association for Natural Gas Vehicles, “as many as one million natural gas-powered cars, trucks and buses could be plying Middle Eastern roads by the end of this decade.”
While Egypt already had some 70,000 natural gas vehicles driving over its roads and highways in 2006, the country has aims to reach 145,000 by 2010, and Abu Dhabi plans to have 10,000 vehicles running on natural gas. Even Iran has joined the race for green cars. In 2007 the BBC reported that Iran had announced it “will stop producing purely petrol-driven cars and produce more dual-fuel vehicles, which also run on gas.” In 2006 some 1,150,000 vehicles were manufactured in Iran.
Arab governments are also investing in the green car business. An affiliate of the Qatar Investment Authority (QIA) led a $65 million financing round for Fisker Automotive Inc., a producer of plug-in electric hybrids, reported Cutting Edge news. “Al Yousuf, a Middle East investment house and trading group based in Dubai has, since last March, financed two alternative vehicles companies, the Ontario-based Phoenix Motorcars and Zap Inc., an electric car company, in Santa Barbara, CA.,” stated Cutting Edge. In anticipation of the key role Lithium batteries will play in the electric car industry, Al Yousuf also invested in the Nevada-based lithium ion battery maker Altair Nanotechnologies Inc.
Word on the street
Zeid al-Abdallat, general manager of the Abu Khader Group, the dealer for Cadillac, Hummer, GMC, Opel and Chevrolet in Jordan, is enthused by the green trend. “We have been negotiating the import of green cars to Jordan with GM, which offers a wide variety of hybrid cars and expect to have them on the market hopefully very soon,” he said and underscored that he had been surprised by the number of people inquiring about hybrid cars in Jordan.
On the other hand, Bassam Saadi, general manager of Bahi Motors, distributors for BMW in Syria, is doubtful as to the readiness of the local market to embrace green cars, saying, “I don’t see it happening before at least five years. It is matter of cultural awareness, one that still lacks in the region.”
The current economic recession might also be another obstacle that may hinder the propagation of hybrid cars in the Middle East. With the economy slowing down, car makers might also be more reluctant to invest in green technology, at least for the foreseeable future.
