Free Zone sees nearly 200% increase in electric vehicle clearance — JFZIC

AMMAN — As consumers continue to be plagued by supply shortages and serious hikes in gasoline and hybrid cars’ prices, electric cars are witnessing a rise in demand, according to representative of the automobile sector at the Jordan Free Zone Investor Commission (JFZIC) Jihad Abu Nasser.

He noted that electric cars’ clearance has neared “a 200 per cent growth”, as roughly 4,000 electric cars were cleared in the past four months while 1,402 were cleared at the same time last year.

“Although the nine-day eid holiday slowed things down a bit, 700 electric cars were cleared in the past three weeks and I expect that number to reach a 1,000 by the end of this month,” Abu Nasser told The Jordan Times, adding that electric cars’ clearance in the upcoming period is expected to stand at 1,000 a month, minimum.

This growth, he continued, has compensated for the lack in gasoline and hybrid cars that lead traders to turn to the Chinese market, from which electric cars are imported, as their prices are still “affordable” by Jordanian citizens.

Mohamad Alsalloum, the chief financial officer at a car company in the Zarqa Free Zone, predicts that electric cars will be Jordan’s “future”.

In the past five months, said Alsalloum, “our sales from hybrid and gasoline cars dropped by 100 per cent but we were able to recover by turning to electric cars”.

“Currently, we almost exclusively buy and sell electric cars, whereas before this supply shortage crisis we almost never sold them,” he added, noting that the continuing rise in gasoline prices is another contributing factor in this rising demand. 

According to Abu Nasser, Gasoline cars’ clearance decreased by 15 per cent while hybrid cars recorded the highest clearance drop by 50 per cent, as the number of cleared hybrid cars in the past four months is roughly 2,000, while at the same time last year, it was over 4,000. 

Member of the Amman Chamber of Commerce Tareq Tabba’a noted that “the prices of cars and car parts included in the manufacturing process witnessed a notable increase because most automobile factories around the world halted production during the outbreak of the COVID-19 pandemic, causing a global shortage in supply”.

The 10 per cent increase on hybrids’ customs duty at the beginning of this year, which now stands at 55 per cent, also added to the global price hike, Abu Nasser noted, adding that gasoline cars pay 91 per cent customs, while the customs rate for electric cars is 10 per cent. 

In the next couple of months, the prices of gasoline and hybrid cars are expected to increase by 15 per cent due to this “continuing global supply shortage”, Tabba’a told The Jordan Times.

“The prices of car parts, which pay a customs duty ranging between 5 and 15 per cent, will also witness at least a 20 per cent increase,” he continued. 

According to Tabba’a, car parts entering Jordan from Europe, the US, Canada, or Gulf countries will be less affected by the increase as they are not subject to customs because Jordan has free trade agreements with these countries. However, car parts from China, Korea and Japan, which are where the majority of Jordan’s automobile exports come from, will see a notable increase.