You may not expect the major oil producing region of the Middle East to have an interest in EVs. However, increasingly, as countries in the region begin to embrace the idea of a post-oil future, investment into the EV space is growing. Subsequently multiple players are looking to move or have moved into the region.

The Current Landscape of the Middle East EV Market

Leading the transition are the UAE and Saudi Arabia. In 2023, the UAE sold nearly 35,000 EVs, while Saudi Arabia sold around 1,500. Despite these numbers being a fraction of the total vehicle sales (an estimated 261,000 for the UAE and 612,000 for Saudi Arabia), there is increasingly more ambition to increase EV sales. The UAE aims to have 50% of vehicles on the road be EVs by 2050, whilst the cities of Abu Dhabi and Dubai are introducing more ambitious targets for EV adoption in the near future.

Investment and Key Players in the Region

The top players in the region include VW, Tesla, and Changan Auto, all of whom export their vehicles from China. However, there is room for growth as BYD, GM and Ford have all expressed intentions to begin selling EVs to the region.

In terms of infrastructure investment, it remains in its early stages. Earlier in 2024, Statevolt, a US-based battery manufacturer, announced its plans to invest USD 3.2 billion into a 40GWh gigafactory in Saudi Arabia that will be operational by 2026. Additionally, at the end of 2023 the UAE announced its plans for an inaugural battery recycling plant in the region.

Aside to this, the Saudi Public Investment Fund (PIF) is heavily involved in electrification, backing companies such as Lucid and Hyundai with billions of dollars to begin electric vehicle production in the country.

Both Saudi Arabia and the UAE are focusing on building charging infrastructure, with initiatives such as the establishment of the Emirates Electric Vehicle Charging Stations Co., and pricing mechanisms to help incentivise private investment. Additionally players such as ABB are investing in charging infrastructure the region.

Chinese OEMs Eyeing Middle Eastern Market

With most EVs in the Middle East being imported from China, Chinese manufacturers see the region as a prime area for expansion. Skyworth Auto and Arcfox this year have inked agreements to enter the Middle East with local partners worth billions of dollars, while Venucia, a subsidiary of Dongfeng Motors, is making its mark in the region through strategic partnerships with multiple local players.

Rho’s Evaluation, Future Outlook and Opportunities

While EV sales in the Middle East are currently modest, there is potential for growth, especially for Chinese OEMs that are facing challenges in other markets. Consumer loyalty to brands may not be as strong in the Middle East, and the region’s wealth attracts investment, making it an enticing market for EV expansion.

That considered, players that do invest in production capacity in the region, be it vehicles or batteries, are faced with the challenge of finding the consumers. Consequently, EV sales in the region in the near future will remain dominated by imports, especially from China. However, as electrification gathers pace on a global scale it is likely local production will build out.

More Information

For more information on how our research can support you, get in touch.

Image credit: Adobe Stock

Sources: ABB, Venucia, Skyworth Motors, Statevolt, Hyundai, Lucid