<a class="" href="https://www.arabnews.com/node/2266876">How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East </a>

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 ICE engines before the year ends.

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

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.”

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

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.

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

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.