Powering up electric vehicles in Saudi

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• 77,000 charging stations required by 2030 to cater for 1.3m EVs 
• Government increased commitment to Tesla rival Lucid Motors
• EV Metals developing facility for lithium-ion batteries used in EVs
• Car makers such as Mercedes and Audi will be all-electric by 2030

Electric vehicles (EVs) are a rare sight on the streets of Riyadh or Jeddah in Saudi Arabia.

This is partly due to a lack of charging infrastructure but mainly because commercial sales have yet to start – the only EVs in evidence are ones that individuals have privately imported.

“You see the odd Tesla or other EVs on the streets, but they’re few and far between,” says Tony Mazzone, energy and EV infrastructure director at Electromin, which is building a network of EV charging stations around the country.

• Electric vehicles: if you can’t beat ’em, join ’em

The situation could change quickly. Car manufacturers are talking to the Saudi Standards, Metrology and Quality Organization (SASO) to gain approval for selling EVs. And investment is ramping up in infrastructure and in the local production of vehicles and batteries.

Electromin – a subsidiary of service stations owner Petromin – is due to see its first 100 charging locations go live in the coming weeks. Another filling station operator Sasco started installing EV charging points in August 2019.

Huge market potential

The potential is far greater though. A study by consultancy firm EY for Electromin estimated the country would need 77,000 charging stations across 30,000 locations by 2030 to cater for the 1.3 million EVs expected to be on the road by then. 

“We’re at the very beginning of this journey,” says Mazzone. “The first 100 charging points are just the tip of the iceberg.

“A lot of the major car manufacturers will be all-electric by 2025 or 2030, so if you want to buy a Mercedes or an Audi by then it will be an EV, you won’t have a choice.”

Investment is pouring into other areas too. The most high-profile actor has been the government’s Public Investment Fund (PIF), which in 2018 invested first in Tesla and then in rival Lucid Motors.

It sold most of its Tesla shares in 2019, but has steadily increased its commitment to Lucid.

In early 2022, the PIF backed a $2.5bn fundraising for Lucid, as part of a deal which saw the car firm join the New York Stock Exchange. As of early June, Lucid had a market capitalisation of $31.6bn, with PIF’s 61 percent stake worth around $19.4bn.

Lucid is not the only EV firm with a Saudi investor. US-based Rivian Automotive is backed by the Jeddah-based Jameel family through its Jimco investment arm.

The family also owns the Abdul Latif Jameel conglomerate which in June committed up to $220m in Greaves Electric Mobility, an Indian firm that makes two and three-wheeled vehicles. 

Local manufacturing

Nonetheless, Lucid is at the heart of Saudi Arabia’s EV push. In February, Lucid confirmed plans to build an assembly plant at King Abdullah Economic City, where capacity will eventually reach 150,000 vehicles a year. Construction work began in May.

The Saudi government offered another boost to Lucid in April by pledging to buy 50,000 Lucid cars over ten years, with an option for a further 50,000.

Lucid’s factory is not the only one being planned. At the World Economic Forum in May, investment minister Khalid Al-Falih said it was just one of three EV assembly facilities that could be set up in the kingdom, although he gave no details of the others.

One he might have had in mind is that proposed by Australia’s Avass Group. In December, it announced a memorandum of understanding (MoU) to manufacture EVs and lithium batteries in the kingdom.

The timing and location of the project are unclear, but Avass views the country as a potential export hub.

“Saudi Arabia stands at a central point between Asia and Europe which gives it a strategic location advantage as a production hub,” the firm’s chief executive Allen Saylav stated at the time.

Another Australian-linked firm, EV Metals Group, is developing a facility at Yanbu to produce lithium, nickel and other metals needed for lithium-ion batteries used in EVs. 

Chief executive Michael Naylor tells AGBI that construction work on the lithium chemicals plant will start in the second quarter of 2023, with commissioning due in the second half of 2024.

He says the battery chemicals complex “will be a midstream processing hub for the high-purity chemicals required by EV manufacturers in Saudi Arabia and other key countries seeking secure, transparent and stable supply chains.”

International expertise

Such international investors will be key to developing the Saudi EV industry, given the limited local industry knowledge and experience.

They also support wider government strategies towards economic diversification and decarbonisation.

Investment minister Al-Falih commented in mid-May that EV manufacturing formed part of plans to develop the kingdom’s manufacturing base.

“The sector will also play an important role in our transition to a greener economy and in the kingdom’s efforts to realise its commitment to reach net zero [carbon emissions] by 2060,” he said.

Many changes are needed in Saudi Arabia for that target to be met, but getting more EVs on the streets of Saudi cities will be a useful start.

EVs around the region 

• Bahrain – the first public EV charging station was installed in April 2021, at the Atrium Mall in Saar. A few others have followed, but the network remains limited. Take-up has also been hampered by the limited availability of spare parts and servicing
• Kuwait – Kuwait Ports Authority announced plans in 2021 to develop an ‘EV City’ to attract EV manufacturers, but the details remain unclear
• Oman – the local Mays Motors launched the Gulf’s first domestically-produced EV in February: an angular two-seater with a top speed of 280km/h. Regulations to encourage more charging points are due by the end of 2022
• Qatar – Doha aims to have a wholly-electric public bus fleet by 2030. Kahramaa has taken a lead in building a charging network for cars, with 100 due by November. The Public Works Authority (Ashghal) signed a deal in 2021 with ABB to produce electric chargers for EVs
• UAE – the regional leader, with several hundred charging points and thousands of EVs on the roads. Dubai is at the forefront: it has 325 charging stations and more than 5,100 registered EVs as of January 2022