Saudi Arabia has set forth a visionary plan to embrace electric vehicles (EVs) as part of its long-term sustainable development strategy. Recognizing the need to reduce dependence on oil and address environmental concerns, the Kingdom is actively promoting a transition to cleaner energy sources, including electric mobility. The transportation sector in Saudi Arabia accounts for nearly a quarter of the country’s total energy consumption. With the recent decision to allow women to drive, energy consumption has further increased, emphasizing the necessity to find sustainable alternatives. As one of the world’s largest oil producers, Saudi Arabia is committed to diversifying its economy and reducing its reliance on oil. Embracing electric vehicles is a significant step towards achieving a post-oil future, ensuring long-term sustainability and economic resilience. In November 2022, Saudi Arabia launched Ceer, the nation’s first electric vehicle manufacturer. The company made a substantial investment of $6 billion in establishing its manufacturing plant. This milestone initiative is expected to attract $150 million in foreign direct investment, foster technological advancements, and create 30,000 direct and indirect jobs. Ceer’s collaboration with strategic partner Foxconn aims to make a lasting impact on Saudi Arabia’s economy. By 2034, the venture is projected to contribute $8 billion to the country’s GDP, driving innovation, manufacturing, and job creation in the electric vehicle sector.
Recognizing the critical role of charging infrastructure in facilitating the widespread adoption of electric vehicles, Saudi Arabia is actively developing a robust network of charging stations across the country. This infrastructure will ensure convenient access to charging facilities for EV owners, further encouraging the transition toward electric mobility.
Why is Saudi Arabia a kingdom of oil richness transitioning to EV?
Motivated by the global shift towards cleaner energy sources and the urgency to combat climate change, Saudi Arabia is actively adopting more environmentally friendly transportation options. Electric vehicles 2023 (EVs) play a significant role in this transition as they produce lower or zero tailpipe emissions, leading to improved air quality and reduced greenhouse gas emissions compared to traditional internal combustion engine vehicles. However, it is important to note that the transition to EVs is primarily focused on the light transport sector, while sectors such as trucks, ships, and planes are expected to continue relying on petroleum-based fuels.
Although there is a slight flattening of the demand curve for oil, overall demand is projected to continue growing. Recognizing this, Saudi Arabia is exploring alternative modes of mobility beyond electric vehicles to promote social and environmental values. As part of its commitment to investing in the future and staying ahead of the curve, Saudi Aramco, the national oil company, is actively experimenting with hydrogen fuel cells.
In May 2022, Lucid Motors, a prominent US-based EV manufacturer, announced its plans to construct manufacturing facilities in Saudi Arabia with a capacity to produce 155,000 battery cars & e-vehicles. Currently, EVs are not available for purchase within the Kingdom but they have to import. To accelerate the adoption of EVs, the Saudi government has committed to purchasing 100,000 vehicles over ten years. The shift towards electric cars & hybrid cars is just one component of a broader strategy aimed at diversifying the Saudi Arabian economy and ensuring long-term sustainability. By investing in EV manufacturing, experimenting with hydrogen fuel cells, and actively participating in the global transition towards cleaner energy sources, Saudi Arabia aims to position itself as a forward-thinking and environmentally conscious nation. The Kingdom aims to achieve success as a key player in the global EV market just like they achieved in oil.
What are the challenges faced by Saudi Arabia in adapting EV’s
Climate challenge: Charging infrastructure poses a significant challenge for the adoption of electric vehicles (EVs) in Saudi Arabia. The country’s vast size and desert climate, coupled with the long distances between cities and the heavy use of air-conditioning, contribute to “range anxiety” among Saudi drivers. To address this, experts recommend the establishment of a comprehensive nationwide charging network, with charging stations strategically placed along main roads. An optimal solution could involve the development of isolated microgrids powered by renewable energy, supported by diesel backup, ensuring a reliable and sustainable source of electricity for EV charging. Additionally, EV manufacturers must demonstrate that their vehicles are suitable for the Saudi climate, withstanding the extreme heat and maintaining optimal performance. Overcoming affordability barriers is another key aspect, as the cost of owning an EV in Saudi Arabia can be considerably higher compared to traditional internal combustion engine vehicles. To promote widespread EV adoption, the Saudi government could provide subsidies and incentives to make EVs more financially accessible for consumers by integrating electric vehicle charges & electric vehicle stations in future projects. By addressing these challenges, Saudi Arabia can accelerate its transition towards a greener and more sustainable transportation system, reducing dependence on fossil fuels and promoting a cleaner and healthier environment for all.
Charging installation: The ambitious goal of introducing 700,000 electric vehicles in Riyadh by 2030. necessitates the establishment of a robust charging infrastructure. This requires significant investment, local manufacturing capabilities, and supportive government policies. By prioritizing the expansion of charging stations, Saudi Arabia aims to boost EV sales, create employment opportunities, and shape positive perceptions of electric vehicles among consumers. The installation, maintenance, and operation of charging units require skilled professionals, thereby stimulating job growth and contributing to overall economic development. As more charging stations become available, it becomes more convenient for EV owners to charge their vehicles, reducing concerns about range anxiety and increasing the attractiveness of EVs to potential buyers.
Cost of Service: The relative novelty of electric vehicle (EV) technology presents a challenge in terms of the availability of skilled workers trained in EV repairs. Compared to traditional internal combustion engine (ICE) vehicles, there are currently fewer technicians and mechanics with expertise in diagnosing and repairing EVs. Due to the differences in components and systems between EVs and ICE vehicles, specialized training is required to effectively address issues specific to EVs. This includes understanding high-voltage electrical systems, battery management systems, regenerative braking systems, and other EV-specific components. As a result, the pool of qualified EV technicians is relatively small. The scarcity of skilled EV technicians contributes to increased costs for repairs. Since there are fewer service centers or repair facilities equipped to handle EV maintenance and repairs, the demand for their services often exceeds the supply. This can lead to longer waiting times for repairs and higher labor costs. In some cases, complex repairs for EVs can take several months due to the limited availability of specialized parts or the need to involve manufacturers for assistance. This further emphasizes the importance of having a well-trained and qualified workforce to efficiently address EV-related issues and minimize downtime for vehicle owners.
To address this challenge, efforts are being made to expand training programs and certification opportunities for technicians specializing in EV repairs. Automotive manufacturers, educational institutions, and industry organizations are collaborating to develop comprehensive training programs that cover the unique aspects of EV technology. By investing in training and certification programs, the aim is to increase the number of qualified technicians capable of diagnosing and repairing EVs, ultimately reducing costs and improving repair turnaround times. As the EV market continues to grow and EV technology becomes more mainstream, it is expected that the availability of skilled technicians will increase. This will contribute to a more robust and efficient aftermarket support system for EVs, making repairs more accessible and cost-effective for EV owners.
Electric Vehicle Battery challenge: Lithium-ion batteries (LIBs) are used for EVs and grid storage applications because of their superiority to conventional lead–acid or nickel–cadmium batteries in terms of energy density, specific power, cost, safety, cycle life, and calendar life.
Saudi Arabia experiences high temperatures, especially during summer months, which can negatively impact the performance and lifespan of lithium-ion batteries. High temperatures can accelerate the degradation of battery materials, reducing their capacity and overall lifespan. Maintaining optimal temperature conditions for the batteries becomes crucial to ensure their longevity and performance. The government and private entities need to invest in building an efficient and accessible charging infrastructure to overcome range anxiety and encourage EV adoption.
Lithium-ion batteries have improved over the years, enabling longer ranges, there is still a need to expand the charging network, including fast-charging stations, along highways and major routes to address the long-distance travel requirements of EVs. The range and the battery capacity of an EV are not linear; the weight of the battery pack increases with an increase in capacity, which adversely affects the efficiency of the vehicle on the road. It is therefore important to compare electric car batteries and battery systems based on energy and power densities, rather than on range requirements.
Mineral challenge: Charging infrastructure plays a crucial role in the ambitious Vision 2030 framework of Saudi Arabia, spearheaded by Crown Prince Mohammed bin Salman. Recognizing the significance of emerging technologies, the Kingdom aims to diversify its economy, To support this vision, the availability of critical minerals becomes paramount, as EV batteries rely on minerals such as lithium, cobalt, manganese, nickel, and graphite. Saudi Arabia’s strategic geographical location, at the crossroads of Africa, Asia, and Europe, positions it as a pivotal point for importing these minerals from mines around the world. However, the Kingdom is exploring innovative and economically efficient methods to extract and process lithium, a vital mineral for Electric car battery production, from seawater desalination and the brine associated with oil extraction. By utilizing these local resources, Saudi Arabia aims to establish a domestic supply chain for lithium, significantly reducing production costs and minimizing vulnerabilities associated with transnational supply chains. Building on the success achieved in the oil industry, Saudi Arabia aspires to become a key player in other minerals as well.
Accelerating Investments in EV Infrastructure: Paving the Way for a Sustainable Future
As part of Saudi Arabia’s commitment to diversify its economy beyond petroleum, significant strides have been made in developing both the necessary electric stations for electric vehicles (EVs) and establishing its own EV manufacturing plant. These endeavors highlight the Kingdom’s global recognition as a pioneer in the production of diversified electric vehicles.
In alignment with their goals, the Saudi Arabian government, as of 2021, outlined plans to install over 2,500 EV charging stations throughout the country by 2030, encompassing both public and private infrastructure. This robust network aims to facilitate the widespread adoption of EVs and provide convenient charging options for EV owners across Saudi Arabia.
In November 2022, Saudi Arabia achieved a major milestone by launching Ceer, the country’s inaugural electric vehicle manufacturer. This landmark event not only showcases the Kingdom’s dedication to transitioning to cleaner energy sources but also signifies its entry into the EV manufacturing sector. The establishment of Ceer represents a significant investment of $6 billion, highlighting the commitment to developing a competitive and innovative EV industry within Saudi Arabia.
Furthermore, on June 11, Saudi Arabia inked a substantial $5.6 billion agreement with Human Horizons, a prominent China-based electric and autonomous vehicle manufacturer. The deal, announced during the 10th Arab-China Business Conference held in Riyadh, entails collaboration between the two entities to develop, produce, and sell vehicles specifically in Saudi Arabia. This partnership demonstrates the Kingdom’s determination to leverage international expertise and resources to bolster its EV industry, further solidifying its position in the global market. transitioning towards cleaner energy sources. Saudi Arabia now faces intense competition from global powers that lead the world in electric vehicle (EV) production and control of critical inputs. In the race for geopolitical relevance in the post-oil era, Saudi Arabia has a different approach. It believes that winning doesn’t require having the biggest or fastest electric car in the world, but rather the necessary resources and unwavering conviction to carve out its path toward global competitiveness. By leveraging its available resources and demonstrating commitment, Saudi Arabia aims to establish a strong position in the EV industry and secure its role in the evolving global landscape.
Made in Saudi Arabia: Strengthening the Nation’s Manufacturing Landscape
Saudi Arabia is actively working towards establishing a domestic electric vehicle (EV) industry and has expressed interest in attracting international automakers to establish production facilities within the country. The objective is to localize the manufacturing process, stimulate economic growth, and promote the development of the EV industry. In collaboration with China, Saudi Arabia has taken significant strides in this endeavor, with BYD, the world’s largest EV maker, recently launching its passenger vehicles in the Jordanian market, marking an important milestone in their expansion into the Middle East. The Saudi Ministry of Industry and Mineral Resources has disclosed that there are currently 160 vehicle factories operating in the country, producing a wide range of electric cars, Hybrid cars engine parts, accessories, and electric vehicles. These manufacturing facilities, coupled with optimized cost structures, provide a robust infrastructure to drive innovation and support the Kingdom’s goal of producing around 300,000 cars by 2030, to account for 50% of car sales in the Gulf Cooperation Council countries by 2025. The government has taken steps to create a supportive regulatory environment for manufacturing electric vehicle stations. For instance, they have introduced regulations and standards for EVs, including safety and efficiency guidelines. Additionally, there are incentives and subsidies available to encourage the purchase and use of electric vehicles. click here to know more . These efforts align with the country’s commitment to reducing carbon emissions, improving air quality, and mitigating the environmental impact of transportation.
