I have been camping in Dubai for the last few days, and as is a habit now, the trip turned into a market study of the delivery market. Most of my current observations about Dubai have already been captured in our rather comprehensive Global Fleet and Delivery Market Report that is available for purchase. The report looks at some of the most populated geographies in the world and throws an estimate on how many electric scooters/motorcycles would be needed by delivery businesses globally. It’s a great tool for future gazing, for an OEM targeting the delivery business, or an investor who has, or plans to, write a cheque for such an OEM. Here is the link.
InsightEV – Global Electric Mobility
However, this trip to Dubai made me see the city in a new light and observe why it is extremely challenging for electric two-wheeler electrification.
The Need, the Want…Or the Lack of Them
Let’s get the indices out of the way first. Dubai has a TWAR (Two-wheeler affordability ratio) for commercial motorcycles of 1.9, one of the lowest in the world. In simple words, delivery motorcycles, most of which are Bajaj-TVS-Honda 150cc machines, are dirt cheap.
The structure of the market is such that most riders rent their machines from fleet deployers. It doesn’t look like the fleet deployers are stressed about the prices of the motorcycles.
The FAR (Fuel Affordability Ratio) of Dubai stands at 11.18. Again, this is very low as is expected in any major city of an oil-rich region.
Combine the two, and it is clear that Dubai has no pressing economic need to electrify its commercial two-wheeler fleet.
The above statement comes with a load of caveats, as the organised delivery business is run by a bunch of platforms – Careem, Noon, and Talabat are the top three. Just by looking at the machines on the road, it seems that Careem and Noon are leading in this market.
Like any good delivery platform, the bean counters at Careem/Noon/Talabat would be counting the savings if they got their entire fleets to electric. Except they don’t own the fleets. Fleet deployers like Dubai Taxi Corporation do. The fleet deployers also own the relationship with the delivery rider and the relationship with the motorcycle OEM. As of now, the fleet deployers don’t see any reason why they should give up on the trust built with a Honda or a Bajaj to embrace a TailG or a Yadea.
Meanwhile, the delivery platforms are doing their small pilots, driven more by CSR mandates than anything else. Noon has deployed some Vmoto scooters, though I could not find any. Careem has been testing a bunch of TailG commercial scooters. Again, I could not find any event, though there were some Chinese scooters in play, just not in the Careem fleet. There are some more early-stage players as well, but the roads are mostly littered with 150cc motorcycles.
Delivery’s Contribution to Air Pollution
By the way, the entire fleet means about 90,000 motorcycles for the entire city. A substantial number, but nothing when compared to any populated city in ASEAN, LatAm, or India. The rather modest number also means that electrification would be voluntary, not forced.
To put it in perspective, a fleet of 90,000 150cc motorcycles has roughly the same engine displacement as 3500 G-Class G 63s. Looking at the parking lots next to their mighty phallus in the sky, I estimated that Dubai may have more than 7000 of them.
The same fleet of motorcycles would be dwarfed in cumulative engine capacity by just 2500 GMC Yukons. Again, Dubai is GMC’s biggest market for the Yukon outside the United States, so there would be many times more Yukons on the roads.
In short, in a city obsessed with large-engined SUVs and 12-cylinder sports cars, not many would be losing sleep over vehicle pollution from a modest fleet of 150cc motorcycles.
Dubai is Polluted, Just Not Enough
As I type this, I glance at the Plume Labs app and notice that the AQI outside the window is 99. It’s moderate. It could be better, but there is no chatter about this yet. Compared to most large Indian cities, Dubai is clean.
Will that stay for long? Very doubtful. The motor pool keeps on increasing, and engine sizes are large. Not to forget, this is a city where the total number of I-am-not-a Palm trees would be less than that in a single layout of Bengaluru. Dubai is somewhat saved by the sea, but that has limitations. Vehicle pollution will damage the AQI further.
But I observe that tastes are shifting. The Chinese EV brands are here, and they are strong. You can choose between a Zeekr, a Nio, a Xpeng, a BYD, and many more. You can also buy a Tesla, and there are already a few Cybertrucks rolling. Someone has also deployed a fleet of BYD Seal taxis.
Human Nature
If the fleet operators don’t see any urgency in deploying electric two-wheelers, the riders, if they had a say, would find it even more difficult. They ride 150cc bikes, which can be surprisingly quick at the lower end. Driven by the strong urge to earn their livelihood, they have also developed the annoying habit of cutting across screaming Aventadors while delivering pizzas.
A TailG scooter cannot match the thrill.
But the city is also obsessed with BYDs and Teslas. So will the Yadeas and TailGs have their day sometime in the future? Absolutely! Just not today.
