KSA Electric Car Market Outlook to 2028

KSA Electric Car Market Overview

In 2023, the KSA Electric Car Market reached a valuation of USD 0.45 billion, driven by increasing consumer demand for eco-friendly transportation, government incentives, and the rapid expansion of EV infrastructure. The growth is bolstered by the government's Saudi Vision 2030 plan, which emphasizes reducing carbon emissions and promoting sustainable mobility.

Key players dominating the KSA Electric Car Market include Tesla, Lucid Motors, Nissan, BYD, and Hyundai. These companies have established strong positions due to their innovative technologies, strategic partnerships with local entities, and widespread presence across the Kingdom.

In 2024, Lucid Motors increased its production capacity in Saudi Arabia, with plans to produce up to 150,000 electric vehicles annually by 2025. The company invested over USD 2 billion in its Jeddah plant, which aligns with the governments target of making Saudi Arabia a regional hub for EV production. This investment demonstrates the growing demand for EVs and the Kingdom's commitment to local manufacturing.

Riyadh, Jeddah, and Dammam are the dominant cities in the KSA Electric Car Market, accounting for more than 60% of total EV sales in 2023. These cities have a high concentration of affluent consumers, robust infrastructure, and numerous EV charging stations. Riyadh, being the capital and the largest city, has seen the highest adoption rate of electric vehicles, driven by government incentives and urbanization.

KSA Electric Car Market Segmentation

The KSA Electric Car Market can be segmented by product type, end-user, and region.

By Product Type: The market is segmented by product type into Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), and Hybrid Electric Vehicles (HEVs). In 2023, BEVs dominated the market due to their zero-emission nature and alignment with the governments goals for reducing carbon emissions under Saudi Vision 2030.

By End- User: The market is segmented by end-user into personal, commercial, and government fleets. In 2023, the personal segment held the largest market share due to the increasing popularity of electric cars among individual consumers, driven by government subsidies and rising fuel costs. Commercial fleets, especially in the ride-hailing and delivery sectors, are also seeing increased EV adoption due to operational cost savings and environmental regulations.

By Region: Regionally, the market is segmented into North, South, East, and West. The Northern region, including Riyadh, dominated the market in 2023 due to its developed infrastructure and the presence of high-income consumers who are early adopters of EV technology. The Western region, led by Jeddah, also holds a significant share, driven by government investments and local manufacturing.

KSA Electric Car Market Competitive Landscape Overview

Company

Establishment Year

Headquarters

Tesla

2003

Palo Alto, USA

Nissan

1933

Yokohama, Japan

Hyundai

1967

Seoul, South Korea

BYD

1995

Shenzhen, China

Lucid Motors

2007

Newark, USA

Tesla: In 2024, Tesla expanded its presence in Saudi Arabia by opening new service centers in Riyadh and Jeddah. The company plans to invest USD 100 million in setting up more charging stations across the country to cater to its growing customer base. Teslas Model 3 and Model S continue to be among the best-selling EV models in the Kingdom.

Nissan: In mid-2023, Nissan introduced its latest electric model, the Ariya, in Saudi Arabia. This marks Nissans strategy to capture a larger share of the electric vehicle market, particularly with its emphasis on hybrid and plug-in hybrid models, which offer consumers flexibility in fuel options.

KSA Electric Car Market Industry Analysis

Market Growth Drivers

Expansion of EV Charging Infrastructure: By the end of 2024, the Saudi government will have installed over 1,000 public EV charging stations, making EV adoption more practical for consumers. This infrastructure development is essential to reducing range anxiety and promoting wider use of electric cars in the Kingdom.

Investment in Local EV Production: In 2023, the Saudi Public Investment Fund (PIF) invested USD 3 billion in Lucid Motors to expand local electric vehicle production. Lucid Motors aims to produce up to 150,000 vehicles annually by 2025 at its plant in Jeddah, with a focus on luxury electric sedans. This investment is part of a broader strategy to localize manufacturing and reduce dependency on imports, thereby strengthening the domestic market.

Local Manufacturing Investments: The Saudi Public Investment Funds investment in Lucid Motors and other EV manufacturers aims to produce up to 150,000 electric vehicles annually by 2025. This domestic production not only reduces the Kingdoms reliance on imports but also contributes to job creation and technological innovation.

KSA Electric Car Market Challenges

High Cost of EV Battery Replacement: One of the major challenges faced by the KSA electric vehicle market is the high cost of battery replacement. In 2024, the average cost of replacing an EV battery in Saudi Arabia is USD 7,000 to USD 10,000, depending on the vehicle model and battery capacity. This high cost, which is often not covered by vehicle warranties, has deterred many potential buyers from adopting electric cars.

Limited Range of Available EV Models: Despite the growing interest in electric vehicles, the KSA market still suffers from a limited range of available models. In 2023, only 15 different EV models were available for purchase in the Kingdom, compared to over 40 in the United States and Europe. This limited selection has made it difficult for consumers to find vehicles that meet their specific needs, particularly in terms of size, performance, and price.

KSA Electric Car Market Government Initiatives

Saudi Green Initiative (2023): Launched to reduce carbon emissions and promote environmental sustainability, the Saudi Green Initiative aims to electrify 30% of vehicles on the road by 2030. This initiative is a critical driver of EV adoption in the Kingdom.

Lucid Motors Partnership with PIF (2024): In 2024, the Saudi Public Investment Fund (PIF) increased its stake in Lucid Motors, aiming to boost the local production of electric vehicles. The partnership includes plans to develop a manufacturing plant in Jeddah, with the goal of producing 150,000 vehicles annually by 2025.

KSA Electric Car Market Future Market Outlook

The KSA Electric Car Market is expected to witness substantial growth by 2028, driven by government investments, local manufacturing, and the expansion of EV infrastructure.

Future Market Trends

Expansion of Local EV Manufacturing: By 2028, local production of electric vehicles is expected to significantly reduce the cost of EVs in Saudi Arabia. With Lucid Motors set to increase its annual production capacity to 150,000 vehicles by 2025, and additional manufacturers such as BYD and Hyundai planning to establish local production facilities, the Saudi electric vehicle market will experience a decrease in reliance on imports.

Widespread Availability of EV Charging Stations: Over the next five years, the number of EV charging stations in Saudi Arabia is expected to surpass 2,000. In addition to government investments, private sector players like Al- Futtaim and ABB will play a crucial role in developing charging networks in both urban and rural areas. This expansion will support the increasing number of EVs on the road and contribute to higher adoption rates, especially in less developed regions.
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