The Kingdom of Saudi Arabia is taking bold strides towards sustainable solutions within the transport sector, with electric vehicles (EVs) taking center stage. This shift is a signal of impending transformation within the Middle East’s approach to mobility. The crucial question is: are EVs on the brink of becoming an everyday reality?
Last year, the unveiling of Saudi Arabia’s inaugural automotive brand, Ceer, marked the country’s commitment to not just producing EVs, but also fostering a burgeoning industry ecosystem. Backed by the Crown Prince Mohammed bin Salman, Ceer’s launch was a testament to efforts in attracting investments, nurturing local skill sets, strengthening the private sector, and boosting the nation’s GDP as part of the Kingdom’s Vision 2030.
The EV marketplace quickly responded, with key players like Lucid from the US, Aston Martin, and several startups considering Saudi Arabia for production and new ventures. A report by Goldman Sachs suggests that EVs may represent half of global car sales by 2035, in spite of hurdles such as competitive market forces.
Analysts further posit that five years post-2035, a similar share of car sales will feature advanced autonomous or semi-autonomous vehicles. Saudi Arabia, with its roadmap for electrification, acknowledges the critical need for a robust public charging infrastructure to realize these goals. Mohammad Gazzaz, CEO of the Electric Vehicle Infrastructure Co., noted the Kingdom’s population exhibits significant interest in EVs, but the paucity of charging facilities remains a deterrent.
Investors appear cautious, reluctant to fund infrastructure without a substantial number of EVs already in circulation, creating a classic catch-22 scenario. Nonetheless, Saudi Arabia aspires to convert 30 percent of Riyadh’s vehicles to electric by 2030, as part of a broader initiative to slash the city’s emissions by half and chase carbon neutrality by 2060.
Alexander Lemzakov, CEO and co-founder of Wize, a UAE-based eco-friendly mobility startup, observed that the EV sector in Saudi Arabia and the broader Middle East is experiencing brisk growth, spurred by government backing, environmental advocacy, economic diversity, technological progress, and urbanization.
According to Lemzakov, Vision 2030’s aim to diversify the economy and reduce oil dependence dovetails with sustainability efforts, and innovations like battery-as-a-service enhance EV accessibility. He also cited government incentives, vehicle longevity, lower maintenance costs, and reliability as factors propelling EV popularity, especially in business-to-business contexts.
Goldman Sachs projected an upsurge in EV sales to 73 million units by 2040, a leap from about 2 million in 2020, indicating a rise in EVs’ share from 2 percent to 61 percent of global car sales. Additionally, developed countries may see EV sales outstrip 80 percent, reflecting the vehicle type’s broad acceptance.
Mordor Intelligence forecasts the Middle East and Africa automotive EV market to grow from $3.33 billion in 2024 to $9.42 billion by 2029, at a compound annual growth rate of 23.2 percent. Governmental support for eco-friendly vehicles and advances in energy storage within the renewables sector are expected to drive this momentum.
The report further suggests that the expansion of 5G networks and the implementation of Vision documents in several Middle Eastern countries will bolster the regional EV market. Wize has strategically positioned itself for market entry in Saudi Arabia by partnering with logistics and last-mile delivery specialists.
Lemzakov responded to inquiries about the integration of EVs into daily life, predicting substantial market growth over the next three years, facilitated by technological advancements, environmental consciousness, and investments in charging infrastructure. Battery-as-a-service models, he notes, will hasten this growth by making EVs more affordable and addressing concerns about battery life and replacement costs.
He highlighted the explosive growth of the last-mile delivery sector in the Middle East and North Africa, with the adoption of electric motorcycles by a single company making a discernible impact on the region’s EV percentage. The MENA region’s last-mile delivery market is poised for growth, powered by a surge in e-commerce, offering significant environmental and economic benefits.
Faisal Sultan, vice president and managing director of Lucid Middle East, shared optimism for the burgeoning industry and customer demand for top-tier eco-friendly vehicles. Lucid is addressing common barriers to EV ownership such as cost, performance, and range, alongside investing in charging infrastructure, offering new customers a charging allowance for home installation.
With a young, tech-savvy population eager for futuristic transportation, Saudi Arabia is tackling the infrastructure challenge to facilitate EV adoption. As Canalys predicts a 27.1 percent growth in the global EV market for 2024, reaching 17.5 million units, it’s clear that eco-friendly transportation is shifting from aspiration to tangible reality, fueling a future where sustainability and environmental stewardship are at the forefront.