NewBase 05 June-2023 Energy News issue - 1626 by Khaled Al Awadi.pdf

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NewBase Energy News 05 June 2023 No. 1626 Senior Editor Eng. Khaed Al Awadi
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U.A.E: Adnoc signs agreement with Strata and John Cockerill
to make electrolysers in the UAE
The National - John Benny
Adnoc has signed an agreement with Strata and industrial machines manufacturer John Cockerill
to manufacture electrolysers in the UAE for local use and export.
The deal is expected to help the development of the UAE’s green hydrogen economy through the
local manufacturing of electrolysers, the Ministry of Industry and Advanced Technology said on
Thursday.
The signing witnessed by Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and
managing director and group chief executive of Adnoc and Sara Al Amiri, Minister of State for Public
Education and Advanced Technology. Photo: Ministry of Industry and Advanced Technology
Green hydrogen production involves water electrolysis, where an electrolyser uses electricity to separate
water molecules into hydrogen and oxygen. This process enables the capture and storage of hydrogen,
which can then be used as a fuel source.
“Accelerating the development of future industries is one of the main objectives of the National
Strategy for Industry and Advanced Technology," said Omar Al Suwaidi, Undersecretary of the
Ministry of Industry and Advanced Technology.
ww.linkedin.com/in/khaled-al-awadi-80201019/

"Therefore, the ministry is committed to ensuring the national industrial sector benefits from
innovative solutions and advanced technologies that support the expansion of future industries.
“Stimulating co-operation between leading national companies and international and local
manufacturers is key to these efforts,” he said.
Hydrogen is expected to become a critical fuel as economies and industries transition to a low-
carbon world. French investment bank Natixis estimates that investment in hydrogen will exceed
$300 billion by 2030.
The UAE is bullish about hydrogen and has been drawing up a comprehensive road map to position
itself as an exporter of the clean fuel and tap into its future potential. The Emirates is investing
Dh600 billion ($163 billion) in clean and renewable energy projects over the next three decades as
it aims to reach net-zero emissions by 2050.
“Hydrogen is a critical fuel in the energy transition and this agreement underscores how the energy
sector can work with the industrial and hard-to-abate sectors to decarbonise at scale, drive low-
carbon economic growth and enhance energy security,” said Hanan Balalaa, senior vice president,
new energies and carbon capture, utilisation and storage, Adnoc.
“Adnoc will continue to advance lower-carbon solutions and decarbonisation technologies to
strengthen our position as a responsible energy provider and support the UAE net zero by 2050
strategic initiative.”
The agreement will also support UAE efforts to boost localisation in the manufacturing sector. In
2021, the UAE launched its industrial strategy Operation 300bn to position itself as a global industrial
centre by 2031.
The 10-year comprehensive road map focuses on increasing the industrial sector's contribution to
gross domestic product to Dh300 billion in 2031, from Dh133 billion in 2021.
“Strata’s expertise in advanced manufacturing will play a crucial role in establishing the UAE as a
global hydrogen leader,” said Ismail Ali Abdulla, managing director and chief executive of Strata
Manufacturing.
“This collaboration aligns with our strategic vision of driving innovation and economic growth in the
UAE.” Set up by Mubadala in Al Ain more than a decade ago to position the UAE in the global
aerospace supply chain, Strata has billion-dollar contracts with Boeing, Airbus and Leonardo in
Italy, in addition to Pilatus.
A surge in new manufacturing projects for
key technologies including solar
photovoltaic, batteries and electrolysers is
driving global momentum in the world’s
clean energy transition, according to a
recent report by the International Energy
Agency.
This growth is being driven by policy
support and increased investor interest, the
IEA said in its State of Clean Technology
Manufacturing report this month.
The estimated output by 2030 for renewable energy technologies has risen since late last year, led
by 60 per cent growth in solar PV, 25 per cent for batteries and 20 per cent for electrolysers, the
agency said.

UAE to build electric vehicle charging station factory in Abu Dhabi
The National - Fareed Rahman
The UAE has signed an agreement with Shahin, a company being set up in Abu Dhabi by GCC-
based NEV Enterprise, to develop, maintain and operate an electric vehicle charging station factory
in the country to cater to the growing demand for EV infrastructure.
In a move towards sustainable industrial development and promoting electric mobility, the Ministry
of Industry and Advanced Technology (MoIAT) has signed a Letter of Intent (LoI) with Shahin, a
new company in process of setting up in Abu Dhabi by NEV Enterprise, a prominent GCC
establishment.
Shahin aims to meet 40 per cent of the UAE’s “direct current” charging demand by 2030 as the Arab
world’s second-largest economy aims to become net zero by 2050, the Ministry of Industry and
Advanced Technology said on Thursday.
The factory will develop EV charging infrastructure through pre-negotiated offtake contracts.
“By actively contributing to the development of a robust EV ecosystem, this partnership will have a
meaningful impact on our sustainability and decarbonisation agenda, while at the same time
supporting local and advanced technology-driven economic growth,” said Tariq Al Hashimi, director
of technology adoption and development at the ministry.
Demand for EVs in the UAE has continued to rise and is projected to grow at a compound annual
rate of 30 per cent between 2022 and 2028, according to the global electric mobility readiness index
published last year.

A report by consultancy Arthur D Little ranked the country eighth globally in terms of electric mobility
readiness. Electric vehicle sales are rapidly increasing in the UAE, with EVs making up more
than 1 per cent of the overall car market in the country, the Minister of Energy and Infrastructure
said this week.
“This is the tip of the iceberg. The options for those who are going to own an EV have increased
significantly with aggressive competition from Europe, the US and also from … China, [South]
Korea, Japan and others,” Suhail Al Mazrouei told delegates at the Electric Vehicle Innovation
Summit in Abu Dhabi.
The Emirates has increased the number of charging stations in the country by about 60 per cent to
800 in the past three years, Mr Al Mazrouei added.
As part of MoIAT's initial agreement with Shahin, the company will also focus on
research and development in partnership with local higher education institutions, which
will contribute product and software localisation and create opportunities for young
Emirati talent through apprenticeships and job opportunities.
“This collaboration represents a significant milestone in the UAE's journey towards a
greener future, firmly establishing the country as a regional leader in the development
and production of cutting-edge EV charging infrastructure,” said Ramzi Kuhail, chief
executive of NEV Enterprise.
Globally, electric car sales are expected to surge by 35 per cent this year, helped by
government subsidies and the tightening of carbon dioxide emissions standards,
according to the International Energy Agency.
Electric car sales are projected to reach 14 million this year, from 10 million last year,
the Paris-based agency said in its Global Electric Vehicle Outlook in April.

Oman: Hydrom inks deals for first green hydrogen project
TradeArabia News Service
Hydrogen Oman (Hydrom), a subsidiary of the sultanate's Energy Development Oman (EDO), has
signed three agreements awarding the first green hydrogen projects in Oman, thus signifying a key
milestone in the country’s journey to become a global hub for green hydrogen production.
The agreement was inked as a result of the first round of Hydrom’s public auction process to award
large-scale integrated green hydrogen projects to developers.
The auction was held in November last year to award land blocks in Duqm and Dhofar areas for
green hydrogen projects in 2023, in order to meet the 2030 production target of 1 million tons per
annum (mtpa) of green hydrogen.
As per the auction requirements, Oman expects the winning developers to deliver integrated
projects, covering the full green hydrogen value chain, including renewable production, hydrogen
production, hydrogen derivatives conversion and offtake.
Announcing this, The Ministry of Energy and Minerals said the total investments in these three
projects signed with a consortia of Amnah, Green Energy Oman (GEO) and BP Oman is expected
to top over $20 billion.
It joined the Ministry of Housing and Urban Planning and Hydrom for signing a Head-Usufruct
Agreement, granting land rights for renewable energy and clean hydrogen projects.
Hydrom said these contracts are expected to yield a total production capacity of half a million tonnes
of green hydrogen per annum from more than 11.5 GW of installed renewable energy capacity at
the three sites, each covering an area of 320 sq km in the Al Wusta Governorate.

The first of two blocks (Z1-01) in the public auction process launched in November last year was
awarded to a consortium of Copenhagen Infrastructure Partners (CIP), Blue Power Partners (BPP)
and Al Khadra, part of Oman’s Hind Bahwan Group.
The consortium will develop around 200 KTPA of green hydrogen from 4.5 GW of installed
renewable energy capacity, for planned green steel plants located in Port of Duqm, within SEZAD.
The anticipated annual production for this project is 150 KTPA of green hydrogen from 3.5 GW of
installed renewables capacity in Block Z1-03.
Additionally, the third project was signed with the consortium of Green Energy Oman (GEO) for the
development of green hydrogen for the purpose of exporting Ammonia.
The consortium includes Oman’s integrated Energy Company OQ, Shell Oman, Kuwait's state-
backed energy investor EnerTech (ETC), InterContinental Energy (ICE) and Golden Wellspring
Wealth for Trading (GWWT).
This project is expected to produce 150 KTPA of green hydrogen from 4 GW of installed renewables
capacity in Block Z1-04.
Moreover, Hydrom entered into a memorandum of understanding (MoU) with OQ Gas Networks
(OQGN) with an aim to establish collaboration between the parties in the field of green hydrogen
pipeline development.
Earlier this year, Hydrom also signed six term-sheet agreements with developers from Belgium, the
Netherlands, UK, Japan, Singapore, Germany, India, Kuwait and UAE for hydrogen production over
the next seven years..-

QatarEnergy signs PSC for the Agua-Marinha block in Brazil
© Dar Al Sharq Press, Printing & Distribution. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
(PPBL) signed the Production Sharing Contract (PSC) for the Agua-Marinha block which was
awarded to the consortium on December 19, 2022 in the 1st Cycle Permanent Offer round, by
Brazil’s National Agency of Petroleum, Natural Gas, and Biofuels (ANP).
Under the terms of the PSC and associated agreements, QatarEnergy will hold a 20% working
interest, alongside TotalEnergies (30%) Petrobras (operator, 30%), and PPBL (20%).
Commenting on this occasion, His Excellency Saad Sherida Al-Kaabi, the Minister of State for
Energy Affairs, the President and CEO of QatarEnergy said: “We are pleased to sign the Production
Sharing Contract with our partners and with Brazil’s Ministry of Mines and Energy.
This signing builds on QatarEnergy’s sizable upstream presence in Brazil, and we look forward to
progressing with exploration activities on this highly prospective block. I wish to thank Brazil’s
National Agency of Petroleum, Natural Gas, and Biofuels and the Brazilian authorities for this
opportunity and their ongoing support.”
The Agua-Marinha block has a total area of 1,300 square kilometers and is located in water depths
of about 2,000 meters within the prolific Campos Basin. The work program includes drilling one
exploration well during the exploration period.

QatarEnergy signs a 15-year LNG supply agreement with Bangladesh
Source: QatarEnergy
QatarEnergy’s LNG trading arm, QatarEnergy Trading, has entered into a long-term LNG Sale and
Purchase Agreement (SPA) with Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) to
supply about 1.8 million tons per annum (MTPA) of LNG to Bangladesh for 15 years, starting in
2026.
The SPA signing at QatarEnergy’s Headquarters in Doha, was witnessed by His Excellency Mr.
Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of
QatarEnergy, and His Excellency Mr. Nasrul Hamid, the state minister for Power, Energy and
Mineral Resources of the People's Republic of Bangladesh.
In his remarks during the signing ceremony, His Excellency Mr. Saad Sherida Al-Kaabi said: 'Today,
we are proud to be the largest LNG supplier to Bangladesh and Petrobangla by a large margin,
delivering more than 3.5 million tons per annum from Qatar to Bangladesh. These supply
arrangements reinforce our unwavering dedication to safeguarding the energy security of valued
customers like Bangladesh and delivering the reliable energy they require for socio-economic
development and prosperity.'
Concluding his remarks, His Excellency Mr. Al-Kaabi thanked the working teams from both sides
for their dedicated work to reach this agreement, adding: 'I would also like to express our gratitude
to His Highness the Amir, Sheikh Tamim bin Hamad Al Thani, for his wise leadership and his
continued guidance to and support of the energy sector.'
Qatar currently delivers more than 3.5 million tons per annum of LNG to Bangladesh. With this new
SPA, QatarEnergy reaffirms its position as the LNG supplier of choice for its partners in the South
Asia LNG markets.

India Took More Russian Oil Last Month, Crowding out Saudis
(Bloomberg)
India’s imports of cheap Russian oil set another record in May, with the OPEC+ producer wresting
more market share from Saudi Arabia.
The South Asian nation took 1.96 million barrels a day from Russia last month, 15% more than the
previous high in April, according to data from Vortexa Ltd. Shipments from Saudi Arabia slipped to
the lowest level since February 2021, figures from the shipping analytics company show.
The average cost of Russian crude including freight costs landing on Indian shores in April was
$68.21 a barrel, according to data from the Ministry of Commerce and Industry. That’s the lowest
level since the nation started buying major volumes from Moscow after its invasion of Ukraine earlier
last year.
The average cost of Saudi Arabian crude sent to India in April was $86.96 a barrel, while Iraqi oil
was priced at $77.77 a barrel. Figures for May are expected to be released next month, but prices
are likely to have dropped further given global benchmark Brent fell almost 9% during the month.
“Indian refiners continue to show a voracious appetite for Russian crude given their discounts
relative to Middle Eastern supplies,” according to Serena Huang, an analyst at Vortexa. Purchases
of Urals and Sokol oil saw the biggest gain and overall volumes could climb this month and July,
she added.

NewBase June 05 -2023 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil Rises After Saudis Pledge Million-Barrel Cut at OPEC+ Meet
Bloomberg + NewBase
Oil advanced at the week’s open after Saudi Arabia said it will make an extra 1 million barrel-a-day
supply cut in July, taking its production to the lowest level for several years following a slide in prices.
West Texas Intermediate futures jumped almost 5% early in the session before paring gains to trade
under $73 a barrel while global benchmark Brent changed hands at about $77. Saudi Energy
Minister Prince Abdulaziz bin Salman said he “will do whatever is necessary to bring stability to this
market” following a tense OPEC+ meeting over the weekend.
“The voluntary cut, in my view, is notable more for downside protection” rather than to spur a
sustained rally, said Vivek Dhar, director of mining and energy commodities research at
Commonwealth Bank of Australia. Markets could return to focus on the broader outlook of
macroeconomic weakness, he said.
Oil in New York tumbled 11% last month as demand concerns weighed on the outlook, especially
in China. Most market watchers including Goldman Sachs Group Inc. had expected OPEC+ to keep
output unchanged, and the rest of the 23-nation coalition offered no additional action.
That’s left Saudi Arabia sacrificing further market share to stabilize the market. While others in the
group pledged to maintain their existing cuts until the end of 2024, Russia made no commitment to
curb output further and the United Arab Emirates secured a higher production quota for next year.
The OPEC+ deal came after a long dispute with African members over how their cuts are measured,
which delayed the start of the meeting by several hours. Next month’s additional cut could be
extended, but the Saudis will keep the market “in suspense” about whether this will happen, Prince
Abdulaziz said.
Oil price special
coverage

The minister has repeatedly sought to hurt bearish oil speculators, warning them to “watch out” in
the buildup to Sunday’s meeting.
“Saudi Arabia would ideally want prices to be above $80 a barrel, and it is now trading around $77
a barrel,” said Vandana Hari, founder of Vanda Insights, on Bloomberg TV, referring to Brent. If the
health of the global economy falters, the short sellers “will be back in no time,” she said.

NewBase Specual Coverage
The Energy world –June-05 -2023
CLEAN ENERGY
How Ford, GM auto dealers are thinking about Detroit’s EV
transition and their future
CNBC - Trevor Laurence Jockims
KEY POINTS
 Auto dealers are essential to the adoption of EVs for companies including Ford and GM,
which have thousands of local franchise owners instead of offering direct sales like Tesla.
 Dealers are the face and voice of Detroit to the car buyer on key EV issues including tax
incentives to go electric and questions about charging infrastructure.
 Many auto dealership owners are on board with the EV transition, but many owners want
more concessions from auto companies to pay for key investments like charging and worry
about OEMs asserting too much control during the biggest change for transportation in a
century.
Ford Mustang Mach-E vehicles at a Ford dealership in Colma, California, on July 22, 2022.
After a home, buying a car is the most expensive purchase most consumers will ever make during
their lifetime. The transition to electric vehicles by major auto makers is likely to make the process
a little more stressful, at least in the early days of the EV era when many consumers are still under-
informed on EV basics.
If consumers are to be sold on the mass adoption of battery-powered electric vehicles, car dealers
are going to be essential to the pitch. It’s the network of franchise auto dealers who provide

education, service, and face-to-face sales, so companies like GM and Ford are working closely
with them. But it’s a daunting moment for both sides of the car business.
“We haven’t had a shift of this magnitude in the auto industry ever,” said Robb Hernandez, president
of Monterey Park, Calif.-based Camino Real Chevrolet. “The ground is still moving beneath dealers
making decisions. The automakers are doing their best making this shift, but the regulation is more
of the driving force of how we will all have to pivot.”
That includes his home state of California, where 100% of new car sales are mandated to be EVs
by 2035.
“I can only speak for GM,” Hernandez said. “They are listening as we make these changes but the
landscape is ever-changing at this point,” he said. But he added, “Most auto dealers are optimistic
and excited for the changing landscape.”
As of late last year, 65% of Ford’s dealers had opted into the EV certification program (a little
under 2,000, according to data shared by Ford), as it has started to make the role of car dealers
central to the EV transition process.
Many consumers want a streamlined process and virtually every transaction today has some online
component, according to Brian Maas, president of the California New Car Dealers Association. But
with the complicated nature of a vehicle purchase transaction (trade-ins, financing, purchase of
extended warranties and other products), a fully online experience will only work for a percentage
of car buyers. “The rest will still want to ‘kick the tires’ and take a test drive before investing $50,000+
in the average new car,” he said.
This preference is expected to hold true for EVs. A recent report from the California Air Resources
Board (CARB) cites “customer choice,” “vehicle availability,” and “affordability” as keys to mass
adoption, all of which require a critical role to be played by dealers.
“I think CARB understands that dealers are essential to the adoption of EVs,” Maas said.

He pointed to several factors. First, and most obvious, outside of Tesla it is franchised dealers who
have to explain and sell this new technology to the mass market. Second, all the incentives adopted
federally and in states such as California are administered by or through dealers. And finally, EVs
won’t approach affordability in the short term without dealers making these funds available to
consumers and explaining how these programs work at the point of purchase.
Kerrigan Advisors, which works with dealership groups on sales and acquisitions, noted that Ford,
relative to some top global competitors, has a relatively large dealership network to manage through
the EV transition.
“To some, Ford’s approach is a way to weed out the smaller dealers who are unwilling to make the
EV investment,” said Erin Kerrigan, founder and managing director. “Keep in mind Ford has over
3,000 franchises in the U.S.,” Kerrigan said. “By contrast, Toyota has only 1,482 and sells more
vehicles than Ford.”
But she expects more Ford dealers will opt in at a future date, once they observe a meaningful
consumer shift to EVs.
Timing of the EV transition is a concern
While EV sales are increasing rapidly — as recently as 2021, total battery-powered electric vehicle
sales in the U.S. were under 450,000, but Kelley Blue Book says sales surpassed 800,000 in 2022
and are expected to top one million this year — dealers remain cautious about the timelines outlined
by the auto companies.
“Despite significant increases in EV sales in 2023, dealers are largely skeptical about the OEM’s
timeframes on the EV rollout,” Kerrigan said. “Many say they expect the rollout to take twice as long
as expected and EV market share to be half as much as projected by the OEMs.”
Ford’s opt-in window will open again in 2027 for dealers that did not initially join.
Using California as a model — with its timeline being the most aggressive – the process can begin
to feel pretty squeezed, Maas said.
“I like to point out that this is the most significant change in personal transportation since we went
from horses to automobiles early in the 20th century. In addition to changing how vehicles are
powered (from ICE to BEV), we have to provide the infrastructure for charging these vehicles and
the electrical grid to support such charging, and we have to convey to consumers that their driving
behavior will have to change,” he said. The CARB 2035 goal is ambitious, and California is much

further along than any other state with a similar goal or considering adopting one, but “it’s still a
significant leap,” Maas said.
Dealers also read the headlines and have concerns about OEMs being able to produce EVs at the
pace required by mandates, with raw materials like lithium and cobalt in high demand and uncertain
supply. As big a supply-demand issue is whether consumer interest will be sufficient to meet the
mandate set by the state government in California for a full transition in 12 years. It is a national and
state transition that ultimately becomes a local decision.
Even within California, a dealer in a rural area of the state where EV charging infrastructure is a
challenge and where public investment in charging will be less likely is going to be more wary than
a dealer in a major metro area in the state.

A dealer in Santa Monica may decide more quickly, “I need to be all-in on EVs,” Maas said. “Where
you stand depends on where your business sits,” he said. “Significant EV adoption in large cities in
California seems pretty clear now, but the question is will we have significant EV adoption
throughout the entire state, will Eureka have it at the same pace as LA? Maybe, maybe not?” Maas
added.
Who pays for EV charging
The charging element of EVs, more than any other factor, influences how an individual’s day unfolds
in a state like California where two million new cars are sold annually. Factors include car owners
who live in multi-family housing; and the time it can take to charge — as much as 30 minutes to
several hours vs. less than five minutes today to fill a gas tank at the many convenient fueling
stations with prices prominently posted and adjusted frequently.
“These challenges aren’t insurmountable, but we do have to explain them to consumers, honestly,
so that future car buyers are prepared for what lies ahead,” Maas said.
To become “EV certified,” Ford dealerships can buy into a $500,000 tier or a $1.2 million tier, with
the vast majority of that investment tied to the expense of installing EV charging infrastructure. At
the lower end, this certification provides dealers with repair and maintenance capabilities and a
public DC fast charger, but no EVs to show in the showroom, and no access to a Ford.com
presence. It also caps their total EV sales at 25% of inventory. The “elite” tier provides two public
DC fast chargers, demo units, rapid replenishment, and a presence on Ford.com.
Ford CEO Jim Farley told Automotive News last December when it announced that two-thirds of
dealers had signed on for the EV program (most for the higher-priced tier), “The future of the
franchise system hangs in the balance here,” Farley said. “The No. 1 EV player in the U.S. bet
against the dealers. We wanted to make the opposite choice.”
But specific concerns from dealers, expressed to Ford, offer a window into the desire on the part
of the dealers to also ask for deepening commitment from Ford as part of their own commitment to
the e-certification program. One issue has been dealer reluctance to offer public charging at their

locations and asking Ford to up its own investment in public charging, even though dealers are
aware the OEMs are spending billions on factories for new EVs and batteries.
Dealers are prepared to offer charging for new vehicles to be sold on their lot and vehicles being
serviced. But OEMs asking dealerships to serve as public charging stations has led to pushback.
“Tesla pays for its supercharging network, yes with lots of taxpayer subsidies, but they pay,” Maas
said.
“Dealers are in the business of selling and servicing cars, not selling electrons,” he said. While
future business cases may prove that dealers can make money from charging, Maas noted that the
selling of electrons is heavily regulated by public utility commissions across the country. “Maybe
dealers just want to sell and service cars,” he said. “I haven’t been to a dealership that sells
gasoline.”
Notably, Ford announced a deal with Tesla last week to use its charging network, which
surprised some EV experts given the competitive nature of the market, but also placed more
pressure on GM to increase charging options.
Charging is a big issue, but not the only issue for dealers.
“While 24/7 public charging has perhaps garnered the most attention, there are numerous program
features that we have asked Ford to modify or eliminate,” Maas said.
Dozens of state dealer trade associations have challenged Ford on multiple aspects of its EV
certification program, including its basic legality relative to state law about franchise models.
Auto makers reliant on the franchise model to have a financial incentive to control more of the margin
that will be available in the EV market, and have learned from watching the margin profile and quality
control enjoyed by Tesla’s direct-to-consumer model.
“We have to change our cost profile,” Ford CEO Jim Farley told CNBC in February.

Ford’s approach to selling EVs in some ways trying to mimic Tesla’s which gives the company
more control over standards from store to store than can be achieved through Ford’s traditional
franchise model.
There is always tension between franchisors and franchisees, and all states have franchise laws to
try and balance the relationship,
and where individual dealers and
dealer associations are pushing
back is where they feel OEMs
are using the EV transition as a
way to make asks they never
would have made previously.
That is not limited to charging,
but OEM programs dictating how
consumers can reserve EVs,
and prescribing how EVs have to
be sold, dealer trade-in
programs, and service contracts.
“Dealers generally chafe at
manufacturer requirements that
intrude on their ability to sell to
their customers,” Maas said.
“OEMs make cars and the dealer
buys them at wholesale and the
dealer sells. Why should that
change because it’s powered by
electricity? There’s nothing
magic about the fact that it is
powered by electricity,” he
added.
Auto dealership sales market remains hot
Kerrigan said most of the dealers with whom she speaks do expect GM to eventually have a similar
program to Ford’s. Meanwhile, GM is reducing its dealer headcount by buying out existing dealers.
In the case of Buick, GM is offering a franchise buyback for those dealers who do not want to make
the EV investment.
Cadillac has also “quietly reduced” its dealer count through buyouts, Kerrigan said. As opposed to
Ford’s “pay-to-play” strategy, she described GM’s current approach as more carrot than stick and,
in reducing franchise count, ensuring the GM network is well-positioned to sell and service EVs.
Dealers, though, may see two sides to the ways both big OEMs are playing the EV transition. Ford,
by giving dealers the option to opt in later, will be seen by some dealers who are more reluctant
today as being more flexible, if requiring more of an upfront investment today.
Some dealers may see the GM approach as the more rigid one, based on their situation. “If you
sold your store, there is no changing your mind,” Maas said. The OEMs are in a difficult position
attempting to meet all dealer needs and concerns about EVs. “It’s hard to have a national program
that is one size fits all for the new vehicle market.”

In the short-term, the EV concerns are not proving to be a big factor in overall willingness among
entrepreneurs to invest in car dealerships. Amid a big jump in new and used car prices — the
average new car retail price increased from $33,000 to over $46,000 between 2015 and 2023 —
transactions in the auto dealer market were the second-highest ever in 2022, according to Kerrigan,
with a record 845 franchises sold during the first three quarters of the year.
While publicly traded auto retailers retreated from the market as their stock market valuations were
cut, private buyers increased their presence as earnings soared for the third-consecutive year.
Average dealership earnings rose 9% in 2022, which was 210% above the pre-pandemic five-year
average.
“Even in a rising interest rate environment, dealers voted with their pocketbooks and grew their
businesses through acquisition in 2022 and continue to do so in 2023,” Kerrigan noted in its April
report on sales activity.
She said most are not overly concerned about the shift to EVs. While some worry about a decline
in fixed operations revenue from sales and service as ICE cars disappear, others see the potential
for higher revenue in the service and parts department as dealers retaining a higher percentage of
the customer service spend with EVs. In 2022, service contributed 12% of dealership revenue,
according to the National Auto Dealers Association, versus nearly 50% for new car sales and 38%
for used vehicles.
Dealers are gaining a larger share of EV sales, totaling almost 260,000 units in 2022, according to
NADA, and dealers capturing 35% of the new BEV market by the end of the year. “We expect this
to continue as more BEV models are released by the legacy OEMs in the coming years,” NADA
said in its annual report.
“The smartest dealers are trying to figure out where this is going and make decisions both for their
family and investment in the business,” Maas said. “Ultimately, it will be up to consumers to tell the
dealers and OEMs and the larger market what’s going to happen, because if consumers buy these
vehicles in huge numbers it’s a signal to the market we need to respond. But if they don’t buy at the
pace CARB has set, then some adjustment have to be made.”

NewBase Energy News 05-June 2023 - Issue No. 1626 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
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About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the
GCC area via many leading Energy Services companies. Khaled is the Founder of
the NewBase Energy news articles issues, Khaled is an international consultant,
advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks,
waste management, waste-to-energy, renewable energy, environment protection
and sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas
compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes.
Has drafted & finalized many contracts/agreements in products sale, transportation, operation &
maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities.
Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has
participated in numerous conferences and workshops as chairman, session chair, keynote speaker and
panelist.
Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over
1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable
energy, waste management, plant Automation IA and environmental sustainability in different parts of the
world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

NewBase 05 June-2023 Energy News issue - 1626 by Khaled Al Awadi.pdf

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NewBase 05 June-2023 Energy News issue - 1626 by Khaled Al Awadi.pdf