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Could electric cars impact Jordanians’ salaries?

Volkswagen ID 4
(Photo: Twitter)
Volkswagen ID 4

Muath Almbaidheen

The writer is the CEO of the Performance Index Center for Strategic Studies and Consultations.

Globally, by 2030, it is expected to have more than 100 million electric cars compared to 10 million presently. This seems achievable, seeing the decisions made by the main manufacturing countries. اضافة اعلان

US President Joe Biden last year issued an executive order that 50 percent of all new cars sold in the US in 2030 be fully electric, hybrid, or hydrogen-powered. India also aims for electric car sales to account for 30 percent of the total new car sales in 2030. As for China, it started the race early, in Liuzhou, which is considered the capital of Chinese car production, and where sales of electric cars reached 30 percent in 2020.

Locally, one visit to Zarqa free zone could make clear how the auto market will be in the upcoming two years, with most showrooms offering mainly the Chinese fully electric car, the Volkswagen brand “ID4”, which is prevalent in the streets today.
It is clear that gasoline consumption will decrease even more with the entry of fully electric cars, whose charging cost does not exceed JD2 for traveling a distance of 450km, while it reaches JD30 to travel the same distance by using petrol.
The ID4 battery capacity gives it a 450km range, which is enough to travel from Irbid to Aqaba; this is accompanied by a growing availability of fast-charging points in some city stations and on the Amman-Aqaba highway, which encourages buying this type of car.

The increase in the use of electric cars in Jordan is inevitable. It is a reflection of the change taking place in industrial countries, and the result of the low taxes and customs duties levied on these cars, as well as of the increase in fuel prices; this all encourages people to buy cars that offer comfort and the safety technology that contributes to reducing the incidence of accidents and preserves the environment.

Ministry of Energy and Mineral Resources statistics indicate a continuous decrease in the rate of gasoline consumption during the past five years, from 1.431 million tons in 2017 to 1.342 million tons in 2021, a rate exceeding 6 percent. There number of small cars grew from 1.071 million in 2017 to 1.221 million in 2021, a 14 percent increase within five years.

It is clear that gasoline consumption will decrease even more with the entry of fully electric cars, whose charging cost does not exceed JD2 for traveling a distance of 450km, while it reaches JD30 to travel the same distance by using petrol.

According to the oil derivatives pricing equation published on the website of the Ministry of Energy and Mineral Resources, the special tax on one liter of gasoline is 370 fils and 575 fils for 90 and 95-octane gasoline; the government special tax revenue on oil derivatives has decreased by more than JD45 million in 2021 compared to 2017, due to the low rate of gasoline consumption.

Today, the government should realize that it cannot continue to rely on an oil tax as one of the treasury resources, and  that it will not be able to increase the electricity prices or impose any additional annual fees to cover the deficit, which shows already.

The government should look for another alternative to fund its expenses, and make decisions that might be painful, but are required to ensure a sustainable future.

It is not possible to continue imposing new taxes or fees as a solution to cover the fiscal deficit and lack of revenues. What is needed is to increase capital expenditures, encourage investment and amend the regulations to create a sophisticated market and sustainable economy that provides new job opportunities; short of doing all that, a massive entry of electric cars in the market will force the government to find short-term solutions that will impact Jordanians’ salaries.


Muath Almbaidheen is CEO of the Performance Index Center for Strategic Studies and Consultations.


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