How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 

Special How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 
US-based electric vehicle maker Lucid Group, majority owned by Saudi Arabia’s Public Investment Fund, will set up its first overseas factory in the Kingdom as regional demand for EVs accelerates. (AFP)
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Updated 14 March 2023

How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 

How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 
  • Saudi investments in EV production are expected to reach $50 billion over the next decade
  • At least 30 percent of the vehicles on the road in Riyadh are expected to be electric by 2030

DUBAI: Although the electric-vehicle market in the Middle East is still in its infancy, the global rollout of new EV models is accelerating their adoption in the region as governments and consumers embrace the transition away from the internal combustion engine.

A new study by Goldman Sachs predicts that EVs will make up about half of new car sales worldwide by 2035. “While the EV sector is beset by some major crosscurrents . . . our strategists expect technology innovation to supersede these forces in the coming years,” says the report by Goldman Sachs Research.

Meanwhile, as increased competition, government incentives and falling prices of battery-related products and vehicle components make EVs more affordable, the likelihood grows of at least some models becoming as cheap as vehicles with IC engines before the year ends.

STC Group Announces Partnership with #Lucid LLC for Connectivity Services for Lucid Vehicles in KSA. (Supplied)

While Elon Musk’s Tesla brand currently leads the Middle East EV market, among the electric models that can be found in the region are the MG ZS EV, Renault Zoe E-Tech and the Volvo XC40 Recharge Pure Electric, alongside the recently launched Swedish brand, Polestar.

The increasing focus on EV adoption, including in the Arab Gulf states, is largely driven by national commitments to accelerate the transition from fossil fuels to renewable energy sources to achieve net-zero targets within the coming decades.

This transition will not happen overnight, however, as the Gulf countries still need to increase greatly the number of charging stations available for these new vehicles — to give EVs sufficient range and to incentivise consumers to buy electric.

“The market for electric vehicles is expected to grow across the region, driven largely by the continued government-led reforms, specifically in building infrastructure to allow consumers to travel long distances,” Tom Lee, managing director of MG Motor Middle East, told Arab News.

According to market research firm Mordor Intelligence, the Middle East and African EV market was valued at $40.25 million in 2021, and is expected to reach $93.10 million by 2027, registering a compound annual growth rate of more than 15 percent during the forecast period.

The numbers are remarkable considering that the global EV market suffered a major setback during the COVID-19 pandemic, which saw the closure of several manufacturing units and the start of a global semiconductor chip shortage, which continues to impact industries to this day.

Sales of zero-emissions vehicles have since bounced back worldwide, doubling in 2021 from the previous year, marking a new record at just under 7 million cars — equivalent to 10 percent of all car sales, according to the Global EV Outlook, published by the Electric Vehicles Initiative.

The same was the case in 2022, when global sales of EVs steadily increased, with 2 million cars sold in just the first quarter. This year, EV market revenues are projected to reach $322.50 million.

“Education of consumers (in the region) has rapidly increased, driven by GCC countries’ renewable energy plans and the drop in the price of electric vehicles,” Lee told Arab News.

This awareness is likely to grow when the UAE hosts the UN Climate Change Conference, COP28, in November, coinciding with its “Year of Sustainability.” Lee says the UAE’s manufacturing plans are also a lucrative investment opportunity.

Currently, eco-friendly or hybrid vehicles make up some 50 percent of the Dubai Roads and Transport Authority’s taxi fleet. A five-year plan has been launched to have only hybrid, electric or hydrogen-powered taxis on the emirate’s roads by 2027.

Launched in 2016, Ekar, the region’s first mobility company and self-drive super app, has jumped on the EV bandwagon, adding 10 Teslas to its fleet available for rent in Dubai and five additional Teslas available in Abu Dhabi’s Masdar City.

“EVs are exceptionally good cars for car sharing,” Vilhelm Hedberg, co-founder and CEO of Ekar, told Arab News.

“There are fewer moving parts in an EV compared to an internal combustion engine car, which has a ton of different opportunities for failure, maintenance and issues to arise, making the vehicle off-road time much lower in EVs.”

Vilhelm Hedberg, founder of Ekar, believes the region is ‘heading in the right direction’ with EV. (Supplied)

At present, there are about 325 charging stations for EVs across the UAE, catering for less than 1 percent of all vehicles registered in the country. However, Hedberg believes the number of EVs on the road will rise over the next couple of years.

“There’s a global readiness equation that’s calculated for EVs and the UAE finds itself ranked eighth in the world,” he said. Norway, China, Germany, Singapore and the UK take the top five rankings for EV market share.

“(Because of) the very fact that the UAE has the infrastructure already beginning to be laid out, it is headed in the right direction.”

With total Saudi investments in EV production expected to reach $50 billion over the next decade, the hope is that least 30 percent of the vehicles on the road in Riyadh will be electric in the next seven years.

“The Saudi public has a strong affinity for their cars. There’s so much enthusiasm for classic cars and for iconic car models,” a spokesperson for Ceer, Saudi Arabia’s first homegrown EV brand, told Arab News.

Ceer, Saudi Arabia’s first homegrown electric vehicle brand, has a production target of 170,000 cars a year. (Supplied)

According to the spokesperson, Saudis “also have a strong affinity for technology” and, therefore, will look to adopt new concepts.

“You can find battery electric vehicles on the streets of Dammam, Jeddah and Riyadh even though many brands don’t sell BEVs officially in Saudi Arabia today,” the spokesperson said, referring to fully electric vehicles with rechargeable batteries and no petrol engine.

Claiming that Ceer’s research on consumer insights revealed a strong interest in the company’s portfolio of vehicles, the spokesperson said: “The interest is both due to the vehicles’ iconic design and infotainment features, but also due to a host of other factors, including value for money, total cost of ownership, and increasing awareness of topics related to sustainability.”

In 2020, there were more than 15 million registered vehicles in the Kingdom. Four-fifths of these were cars or light vehicles. According to the Saudi Energy Efficiency Center, the transport sector consumed about 21 percent of the Kingdom’s total energy that year.

Saudi Arabia plugs into the future

Saudi women test-drive an electric a car manufactured by Lucid Group at the KSA Green Transition Journey exhibition in the Red Sea port of Jeddah. (AFP)

  • With 61 percent of shares, Saudi Arabia is the majority owner of Lucid Group through its Public Investment Fund, or PIF. Set to be built in King Abdullah Economic City on the Red Sea coast, Lucid’s first overseas manufacturing plant will initially reassemble Lucid Air vehicle “kits” manufactured in Arizona, the US.
  • Eventually, the plant will build complete vehicles with a planned peak capacity of 150,000 vehicles a year. Saudi Arabia’s first homegrown EV brand, Ceer Motors, was launched late last year by Crown Prince Mohammed bin Salman.
  • Also backed by PIF, Ceer will be among the first automotive brands to produce EVs in Saudi Arabia, with plans to sell a range of vehicles for consumers both in the country and the Middle East and North Africa region. The first units are expected to become available in 2025.
  • With a production target of 170,000 cars a year, Ceer is expected to create up to 30,000 direct and indirect jobs in the region, and directly contribute $8 billion to Saudi Arabia’s GDP by 2034.
  • The Kingdom’s giga-projects, such as Qiddiya, Roshn and NEOM, have plans to deploy fleets of EVs, produced in time by the Lucid and Ceer factories in King Abdullah Economic City.

Throughout the event, Schneider Electric is highlighting its portfolio of EVlink chargers, including its latest EVlink Smart Wallbox charging stations. (Supplied)

To support the transition from traditional petrol engines to electric mobility, Mohamed Shaheen, KSA and Yemen cluster president at Schneider Electric, believes a strong energy management infrastructure is essential.

The EVlink smart charger launched in the region last year is just one of many next-generation products that will help build a more sustainable energy matrix for the future, he told Arab News.

According to Shaheen, although the cost of an eco-friendly vehicle is markedly lower today than before, simply increasing the number of EVs on the road will not be enough to reduce emissions.

“A smart and sustainable charging experience that can monitor, manage and eventually limit the use of EV charging devices with the aim of optimizing energy consumption can help EVs become even cleaner,” he said.

According to Boston-based Energy Sage, charging an EV is about 3.5 times cheaper per mile than the cost of fueling up a petrol car.

“It is imperative to understand that — in the long term — EV charging is cost-effective,” particularly when steps are taken to develop more sustainable production processes, Shaheen said.

However, despite the growing public readiness for EV adoption in the region, the deciding factor ultimately would be consumers’ willingness to swap their petrol engine vehicle for an electric option.

Surveys show that people are looking for “the reliability and comfort they are used to in traditional engines,” said Lee of MG Motors.

“With the falling prices of EVs and the increase in petrol prices, there has been a fundamental shift in the market.”

Launch event of Ceer, the first Saudi electric vehicle brand, in November 2022. (Supplied)

Pointing to the fluctuations in fuel prices over 2022 as a factor that has influenced consumer decision-making, he said that by 2026 almost 45,000 EVs are expected to be sold in the region.

Fuel bills apart, EVs generally have a strong resale value, which is why more and more people are looking at them as a sound investment, according to Ekar’s Hedberg.

He drew attention to a survey commissioned by Audi Abu Dhabi, which found a change of sentiment among consumers, with 52 percent of UAE residents considering buying an EV.

“But my view of the world is that people shouldn’t own cars,” Hedberg said. “They should treat cars like they treat clothing and interchange them for the various occasions that they need them for,” he said.

Studies show that every car shared removes 17 private cars from the road, he said.

In recent years, the car-sharing trend has caught on in European cities, resonating with people who want to lead a more sustainable lifestyle.

While the same cannot be said for the Middle East region yet, the consensus view of automotive-industry executives is that EVs and new energy vehicles are the way forward.



NEOM sets ambitious target to preserve natural environment

NEOM sets ambitious target to preserve natural environment
Updated 11 sec ago

NEOM sets ambitious target to preserve natural environment

NEOM sets ambitious target to preserve natural environment

RIYADH: As part of Saudi Arabia’s efforts to protect the environment and promote sustainable living, NEOM has pledged to allocate 95 percent of its total area for preservation.

It will also develop a facility in Al-Asilah to preserve the Arabian oryx, the Arabian sand gazelle, the mountain gazelle, and the ibex.

The reserve will be home to one of the biggest wildlife restoration programs in the world and will allow visitors to learn about NEOM’s programs for the development and rehabilitation of vegetation and wildlife.

The announcement was made at the second Tabuk Forum, which was organized by NEOM.

During the forum, NEOM officials highlighted various programs it is currently undertaking in different areas such as social responsibility, sports, tourism, media, career guidance management, human resources, contracts and purchases, hospitality, education, and scholarships.

Saudi Arabia is expanding its ambitions through projects such as The Line in NEOM, a zero-car environment that is part of a 100 percent sustainable transport system.

The city will be 200 meters wide, 170 km long, and rise 500 meters above sea level and will contribute to conserving 95 percent of NEOM’s land and support environmental sustainability.

Its design is based on a new concept of zero-gravity urbanism, the idea of layering city functions vertically while enabling inhabitants to move seamlessly in the city in three directions — up, down, and across — offering quick access to offices, schools, parks, and residential facilities.

The Line’s unique modular design ensures that all facilities and amenities can be accessed within a five-minute walk.

Using an innovative design that requires minimal space and less water, hydroponics gardens will grow fruit, vegetables, and flowers in half the time of traditional agriculture methods.

NEOM has several ongoing megaprojects, one of them being Trojena, a year-round winter sports complex designed by Iraqi British architect Zaha Hadid. And what will be the first outdoor ski resort in the Gulf Cooperation Council region, is set to host the Asian Winter Games in 2029.

Another megaproject is Sindalah Island, a luxury tourist destination.

Global investment in clean energy to reach over $1.7tn in 2023: IEA

Global investment in clean energy to reach over $1.7tn in 2023: IEA
Updated 14 min 46 sec ago

Global investment in clean energy to reach over $1.7tn in 2023: IEA

Global investment in clean energy to reach over $1.7tn in 2023: IEA

RIYADH: As efforts to mitigate the effects of climate change gather pace around the world, investment in clean energy is also witnessing a surge and is expected to reach more than $1.7 trillion in 2023, according to the International Energy Agency.

In its latest report, the IEA said the global energy sector is likely to record investment worth around $2.8 trillion this year of which 60.7 percent will go toward clean technologies.

As security and affordability issues brought on by the global energy crisis gain strength, spending on clean energy technologies will outpace spending on fossil fuels, the report predicted.

Green energy includes renewables, electric vehicles, nuclear power, low-emissions fuels, efficiency improvements, and heat pumps.

According to the report, the leftover global energy investments — slightly over $1 trillion — will go toward coal, gas, and oil.

“Clean energy is moving fast — faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Fatih Birol.

He added: “For every dollar invested in fossil fuels, about $1.7 are now going into clean energy. Five years ago, this ratio was one-to-one.”

The report also predicted that in 2023, spending on solar power is due to hit more than $1 billion a day or $382 billion for the year, while investment in oil production will stand at $371 billion.

From 2021 to 2023, annual investments in clean energy are projected to rise by 24 percent, driven by renewables and electric cars, compared to a 15 percent increase in investments in fossil fuels during the same time frame.

The report noted that over 90 percent of this increase emanates from developed nations and China. This poses a severe threat of creating new energy divides if renewable energy transitions do not accelerate elsewhere.

The IEA attributed the stimulated investments in clean energy in recent years to rapid economic expansion and erratic fossil fuel prices that fueled worries about energy security, particularly in the wake of the Ukraine crisis.

Other factors impacting the jump in investments in clean energy include significant policy support through initiatives in Europe, Japan, China, and other regions as well as the US Inflation Reduction Act.   

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines
Updated 28 May 2023

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

Saudi Fund for Development inks loan deals worth $16m with Saint Vincent and the Grenadines

RIYADH: A new primary care center and a cultural facility are set to be established in the Caribbean island nation of Saint Vincent and the Grenadines thanks to two development loan agreements worth $16 million. 

Signed by the Saudi Fund for Development, the two new agreements are part of the Kingdom’s framework to support the advancement in developing countries and small island developing states worldwide.

The first agreement will oversee the construction of a primary care center in South Rivers for $6 million, the Saudi Press Agency reported. 

The primary care center aims to improve the quality and resilience of the healthcare sector in the island nation while ensuring that locals have access to the necessary health services. 

It will also help in reducing chronic diseases as well as reducing mortality rates in the region.

The project is expected to create direct and indirect job opportunities and train medical staff. 

Meanwhile, the second agreement worth $10 million was allocated to construct a cultural center and a market for craft and agricultural products in Belle Vue.

The project will promote the country’s craft, handicraft, cultural and creative industries. 

It will also significantly promote tourism, social and cultural growth, and public health.

Together, the two projects will contribute to achieving the UN Sustainable Development Goals, specifically good health, well-being, decent work and economic growth.

“We look forward, through the signing of these two agreements, to opening horizons for development cooperation with the Kingdom of Saudi Arabia and strengthening close relations between the two countries,” Prime Minister of Saint Vincent and the Grenadines Ralph Gonsalves said.

SDF Chairman Ahmed Aqeel Al-Khateeb and Camillo Gonsalves, the minister of finance, economic planning and information technology of the island nation, signed the agreements.

Founded in 1974, the SFD has implemented over 700 projects and development programs in 85 countries worldwide. 

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz
Updated 28 May 2023

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

Nama Ventures and RAZ Group fund UAE-based logistics startup Cargoz

CAIRO: Saudi venture capital firms are bolstering the regional startup funding landscape, with Nama Ventures and RAZ Group leading the investment round to support the expansion of the UAE-based logistics startup Cargoz in the Kingdom. 

Cargoz, often called the Airbnb for commercial warehousing, has secured an undisclosed amount in bridge funding from Nama Ventures, RAZ Group and a select few angel investors from the UAE and the Kingdom who are players in the logistics industry. 

The company, founded in 2022 by Premlal Pullisserry and Lijo Antony, offers a platform that connects small and medium enterprises with warehouse companies for short-term contracts. 

According to the press release, the company plans to utilize the funds to spur growth in the UAE and prepare for a soft launch in Riyadh by the third quarter of this year. 

Cargoz has reported significant growth over the last eight to nine months, indicating that it addresses a substantial market issue. 

“We underestimated the pain of finding on-demand storage for SMEs and how broken and stressful that experience was,” Cargoz stated in the press release. 

Nama Ventures, known for its 29 investments, including notable startups like Muqbis, Punt Partners and Faceki, expressed great enthusiasm about backing Cargoz. 

“Nothing makes us more excited at Nama Ventures than seeing founders as complementary as Premlal and Lijo. Premlal breaths logistics; his depth of the space and his understanding of the pains in the space are unparalleled. Lijo, on the other hand, is a coder’s coder; he is very well versed in tech space and knows how to build tech products,” said Mohammed Alzubi, founder and managing partner of Nama Ventures. 

In August 2022, Nama Ventures also led Cargoz’s pre-seed funding round with an undisclosed amount used to foster growth in the UAE. 

China’s 1st homemade passenger plane completes maiden commercial flight

China’s 1st homemade passenger plane completes maiden commercial flight
Updated 28 May 2023

China’s 1st homemade passenger plane completes maiden commercial flight

China’s 1st homemade passenger plane completes maiden commercial flight

BEIJING: China’s first domestically made passenger jet flew its maiden commercial flight on Sunday as China looks to compete with industry giants such as Boeing and Airbus in the global aircraft market.

The C919 plane, built by the Commercial Aviation Corporation of China, carried about 130 passengers on the flight, according to the state-owned newspaper China Daily. The jet took off Sunday morning from Shanghai Hongqiao Airport and landed in Beijing less than two hours later.

The flight was operated by state-owned China Eastern Airlines, and the side of the plane was emblazoned with the words: “The World’s First C919.”

The inaugural flight comes as COMAC looks to break into the single-aisle jet market in a direct challenge to Airbus and Boeing. Airbus’s A320 and Boeing’s B737 jets are the most popular aircraft for domestic and regional flights.

While COMAC designed many of the C919’s parts, some of its key components, including its engine, are still sourced from the West.

According to state media reports, the company plans to build 150 C919 planes yearly for the next five years.

The C919, which has been in development for 16 years, has a maximum range of about 3,500 miles and is designed to carry between 158 and 168 passengers.

Over 1,200 C919 jetliners have been ordered, COMAC says, with China Eastern Airlines under contract to buy five of them.