Of the ten reasons, it could be argued that eight of them are general arguments which could be made in any country globally (the top three reasons were a lack of available charging stations, the duration of charging, and lack of trust in EVs as a new technology). Only two cited barriers could be truly called local, namely that the terrain and weather conditions in Saudi Arabia are not suitable for EVs, and that there is no need to use EVs as Saudi Arabia is one of the biggest petroleum-producing countries.
The experience of the UAE suggests that, if given a chance by manufacturers, EV adoption could be just as fast in the Gulf as in other markets. As of 2021, there were just under 5,000 registered electric vehicles and just over 8,000 hybrid cars in the Emirate of Dubai, based on research from a subsidiary of Dubai Electricity and Water Authority. This was up from approximately 2,300 electric cars and 6,000 hybrid vehicles the year earlier.
In many ways, the UAE’s decision to deregulate retail petrol prices by implementing a new flexible pricing policy linked to global prices has accelerated EV adoption. As petrol prices have risen, UAE consumers have increasingly realised that EVs offer better value for the money. As reported by The National newspaper in late 2022, prices for second hand EVs have often exceeded the recommended retail price for new EVs due to excess demand for these vehicles.
The example of the UAE shows that there should be a strong appetite for EVs across the wider Gulf (you can find EVs being driven in every country in the Gulf, despite there being few manufacturers selling EVs into our markets). The introduction of Saudi-based car brands and local manufacturing will only help to accelerate the growth of EVs, the accompanying infrastructure and the wider supply chain.
As of today, the Kingdom has already announced plans for two manufacturing facilities in the Kingdom. At its peak, Lucid, which is part owned by the Public Investment Fund, will assemble up to 150,000 cars at its facility in King Abdullah Economic City (KAEC). Ceer, the first Saudi electric vehicle brand, will both fully design and manufacture approximately 180,000 electric vehicles in the Kingdom at its own plant in KAEC. When combined, the manufacturing capacity of both Lucid and Ceer will help to ignite the creation of a manufacturing hub that is focused on the creation of a regional car industry.
Looking at the bigger picture, the goal isn’t just to create jobs and diversify the economy. The vision behind developing a manufacturing cluster is to create a focus on EVs that will both meet the needs of the region’s consumers and environment, and prompt other brands to step up their EV aspirations for the Gulf and wider Middle East. Already, we are seeing the establishment of a number of companies that are looking to build EV chargers within Saudi Arabia. The same should be expected for other components, such as solar panels and batteries.
The establishment of a Saudi-based automotive manufacturing industry for the region’s consumers is more than just a practical decision; there’s a symbolism to the Gulf producing its own EVs. It signals to the wider world that the region both wants to be part of the wider move to sustainable mobility, and also encourages its populations to make the shift as well. The Gulf has long been known for its love of large, gas-guzzling vehicles. With the transformational shift we are seeing today in the EV sector, the Gulf may soon be known for its love of greener, more innovative electric vehicles.