Sun Shines on Jordan’s EV Dream

With a deal in place to fit thousands of solar-powered charging stations around Jordan, the Kingdom looks set to embrace the electric car.

By Laith Abou-Ragheb

It might not seem obvious at the moment, but Jordan is gearing up for what could be a transport revolution. You may only have so far spotted the odd Tesla ferrying about a government official, but the foundations for a switch from gasoline to electric vehicles are slotting into place—and at a quicker pace than you might think.

As part of a broader effort to wean Jordan off its overwhelming reliance on expensive and polluting fossil fuels, the government is keen to encourage the mass adoption of electric vehicles, or EVs, for short.

To this end, EVs were recently exempted from taxes and fees, and late last year the government signed a letter of commitment with Chicago-based battery-maker AllCell Technologies to build a network of 3,000 solar-powered electric charging stations over the next decade.

Under the $120 million deal, charging stations are to be installed at gas stations to allow motorists to replenish most of their cars’ battery in about 10 to 20 minutes. While other charging stations that take around four to six hours to refill a battery are set to appear in locations where motorists are likely to be stopping for longer periods, such as shopping malls. An app will be available to find and book the closest available charging point.

NSK

AllCell’s Jordanian CEO Said al-Hallaj predicts his agreement with the government, combined with the tax and fee exemption, will result in roughly 50,000 to 100,000 of Jordan’s 1 million-plus cars becoming electric within five to seven years.

Zero emission EVs have obvious environmental and health advantages. But al-Hallaj, who also teaches renewable energy at Chicago’s University of Illinois, said there’s now a major cost incentive that will convince the average Jordanian motorist to dump their gas guzzling vehicles and go electric.

The government was never going to be able to introduce the same electric car subsidies or grants that have been introduced in some wealthy Western countries. So it came up with the next best thing. “If you import an electric car you are exempt from all charges and taxes –that’s almost double the price of the car. You’re making electric cars more competitive than gasoline cars,” al-Hallaj said.

AllCell introducing electric cars to Jordan

It’s also important to note that the price of solar electricity is plunging and has passed grid parity in Jordan, the point at which it becomes as cheap to produce as electricity from fossil fuels. So according to al-Hallaj, the debate over the commercial viability of solar power has been settled in Jordan, a country which gets around 330 days of sunshine per year.

“The minute that solar reaches grid parity, it’s over,” he said, pointing to the fact that the government is now signing Power Purchase Agreements with solar power companies for around 5 piasters per kilowatt hour. This saving will in turn be passed on to motorists charging their electric cars by solar power, al-Hallaj said, with the cost of traveling 120 kilometers working out at less than JD2, compared to roughly JD10 for a gasoline car.

Al-Hallaj said he’s been working closely with all the major car dealerships in Jordan to raise the profile of EVs, adding that it’s been a positive experience so far. “They’ve been very supportive and we’re trying to make sure that they start their job of educating people.”

Earlier this year, BMW launched Jordan’s first EV in the form of the i3. At the unveiling event, the Managing Director of BMW Group Middle East Johannes Seibart appeared confident he could find buyers for the four-door hatchback, which has an official-range of about 130 kilometers. “We see that we will have a medium to long-term sustainable demand,” he said. BMW’s local sales agent, Abu Khader Automotive, said it expected to sell 25 to 30 units this year.

The i3 retails from around JD33,000. But al-Hallaj said car dealerships would have to import even cheaper models for the mass take-up of EVs. “My target segment of the market is not the rich people, not the Tesla drivers,” he said, referring to the electric car maker that currently only sells vehicles at the luxury end of the market. Rather, al-Hallaj said he’s more interested in targeting the motorists who commute 100 to 200 kilometers daily and earn between JD400 and JD700 a month. “Their income is eaten by fuel that’s polluting the air. If we provide them with the latest electric cars with robust technology, it’s a win-win,” he said.

He added that these particular motorists might be interested to know they now could import a Nissan Leaf electric supermini, with only a few thousand kilometers on the clock, for around JD10,000.

But before you dash out to buy an EV, it’s important to note that regulations still have to be put in place before the project can advance. There’s already a law in place that governs the transportation, or ‘wheeling’, of renewable energy along transmission lines. But AllCell is still waiting on the government to create further legislation that will oversee its business model, which includes a 30 MW solar farm that will feed into the grid to cover the electricity being sucked up by the proposed network of charging stations.

“There are laws for renewable energy wheeling, but in our case, we’re selling to consumers and offering them a service that needs to be regulated,” al-Hallaj said. “We’re waiting to clarify and get proper government agencies to draft and implement the right rules and regulations that cover this concept.”

USAID is helping the government develop a legal and regulatory framework that will allow investment in electric vehicle infrastructure and incentives for the use of renewable energy to charge them.

USAID said this includes legislation that permits the retail sale of electricity by private service providers, an electricity tariff system that’s attractive to investors and to the government, linking financial incentives and exemptions on vehicle taxes with the need to use renewable energy sources, and other non-financial incentives to encourage EV ownership such as dedicated public parking spaces.

Al-Hallaj remains confident the benefits of using solar energy to power electric vehicles are obvious to lawmakers, and the required legislation will be passed shortly. Until then, a test charging station is already up and running at the King Hussein Business Park and the Greater Amman Municipality has agreed to launch a further 10 within a year.

As battery and solar technologies advance and fall in price, al-Hallaj is confident developing countries will come to see their adoption as a clear no-brainer. What’s more, they will adopt and benefit from the technology at a rapid rate, effectively leapfrogging the stop-start transitionary period the technologies are undergoing in more mature economies. They “can’t afford to go down the same path and make the same mistakes as the western world did,” he said.

The success of AllCell’s pioneering project in Jordan will be crucial for the long-term global ambitions of this fast growing company, which began production in 2012 and now has a staff of 45 and is expected to clear $5 to $10 million this year. “Nobody has done this yet in the world. So you take a business model, you implement it with the latest technology, and you prove it in Jordan and it becomes financeable. The minute it becomes financeable, you can take it anywhere in the world,” he said.