Saudi Arabia EV Landscape | 2023

Collation of relevant information on the evolving electric vehicle landscape in the Kingdom of Saudi Arabia

Key Stats, Vision 2030 and PIF Program

KEY STATS – Kingdom of Saudi Arabia

Vision 2030

The government of Saudi Arabia has envisaged and documented its vision for 2030, which acts as the highest level of the policy framework for all the developmental tasks in the country. SAUDI VISION 2030 aims to leverage Saudi Arabia’s three strengths – its recognition as a religious hub for the Arab & Islamic worlds, its investment prowess, and its strategic geographic location to be able to become a trade powerhouse involving Africa, Asia & Europe. The vision has been cascaded into strategic objectives that the government aims to achieve through various vision realization programs.

Public Investment Fund Program

The Public Investment Fund (PIF) Program, in the country’s own words, is amongst ‘the largest sovereign funds in the world’ and one of the key vision realization programs of the Saudi Arabian Government. The PIF drives the expansion and development of Saudi Arabia’s economy, providing the necessary resources and support to establish new industries and unlock fresh opportunities. With a focus on maximizing sustainable returns, PIF is making long-term investments to position itself as a preferred investment partner for global ventures.

Some of its investments include 71 companies created in 13 strategic sectors, 500,000+ direct and indirect jobs created, and USD 620 Billion worth of Assets Under Management (AUM). The investments are done in the Giga Projects like NEOM, ROSHN, etc., MENA region investments like GASCO, NUPCO, KAFD, etc. and international investments in companies like Lucid Motors, Jio Platforms, Reliance Retail, Uber, etc.

The country has set a target of ensuring that 30% of the cars on its capital city’s roads are electric by the end of 2030. The Saudi government is investing heavily in the Electric Vehicles Ecosystem through the PIF program.

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Current Passenger Car Market in KSA

• New passenger car sales in KSA in the year 2021 were over 4,75,800, and in the year 2022, new passenger car sales were nearly 4,81,900.

• Nearly 43% of all passenger cars sold in KSA in 2021 and 2022 were SUVs.

• Toyota and Hyundai were the largest players in 2022, with nearly 30% and 20% market share, respectively.

• Passenger car sales are expected to surpass 5,17,000 units in 2027.

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Approach to Electrification

Saudi Arabia has ambitious plans to go electric and is already positioning itself as a major electric vehicle supplier in the Gulf, Northern Africa, and surrounding regions. The government is collaborating with global players to establish multiple EV manufacturing bases and investing through PIF while participating in major EV production projects alongside established private companies with domain or technology expertise.

In addition, Saudi Arabia is placing significant emphasis on advancing research and mining ventures related to battery materials upstream in order to address crucial gaps in the electric vehicle supply chain. The nation is making concerted efforts to attract lithium miners and battery manufacturers to establish operations within its borders as part of its push to move away from reliance on hydrocarbons. To tap into its estimated $1.3 trillion mineral resources and address the increasing supply deficit, the country is rapidly issuing mining licenses, with lithium emerging as a key source. The government is processing almost 150 exploration license applications from foreign companies and plans to lure $32 billion of investment into the mining sector. Saudi Arabia’s Minister of Industry and Mineral Resources, Mr Bandar bin Ibrahim AlKhorayef has said that the government plans to allot more than a dozen licenses for mining exploration to international investors. In terms of lithium extraction and processing, researchers are currently exploring effective techniques for extracting and refining the mineral from the salty brine byproduct found around Saudi Arabia’s oilfields, with the aim of utilizing it in the production of batteries.

As part of its plan to transform the mining sector into the third pillar of its national economy, Saudi Arabia is providing a range of incentives to attract investors, including the option of receiving up to 75% co-funding of capital expenditure through the Saudi Industrial Development Fund (SIDF). Additionally, miners are eligible for a five-year royalty holiday, while there is a 30% reduction on royalty payments for further downstream production processing.

The energy sector is the backbone of the Saudi economy, with the country claiming to possess a quarter of the world’s proven oil reserves. Saudi Arabia is the world’s largest producer and exporter of oil and also has vast reserves of natural gas, which it uses as an environmentally friendly energy source for urban and industrial use. The country’s economy heavily relies on petroleum exports, which constituted a significant portion of the country’s total exports by value in 2020, amounting to nearly 70%. Furthermore, oil-based sources contributed to around 53% of the Saudi government’s revenue. Amongst others, two key objectives in Saudi Vision 2030, pertaining to the reduction of dependence of Saudi Arabia on oil are:

• To increase the non-oil governmental revenue from SAR 163 billion to SAR 1 Trillion
• To raise the share of non-oil exports in non-oil GDP from 16% to 50%

At the Saudi climate summit, Crown Prince Mohammad bin Salman declared his intention to achieve net-zero carbon emissions by 2060.

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Electric Vehicle Makers

Ceer – Saudi Arabia’s home grown EV brand

• Foxconn will develop the electrical architecture of the vehicles, leveraging their technological expertise to support Ceer’s vision of creating a range of electric vehicles that are built around the themes of connectivity, infotainment and autonomy.

• Ceer is planning on designing, manufacturing and selling a range of vehicles like Sedans and Sport Utility Vehicles to a wide range of customers from the kingdom with license component technology from BMW.

• The vehicles are targeted for 2025, and an expectation of Foreign Direct Investment of USD 150 million is kept where the creation of up to 30,000 direct and indirect jobs will also be targeted as a part of the process.

• Ceer signed a land purchase agreement of 1 million square meters in Industrial Valley in close proximity to King Abdullah Port for an amount of SAR 359 million with Emaar, the Economic City, in November 2022, with construction starting 2023.

Lucid Motors

Lucid Motors is an American EV automotive company. It has entered into an arrangement with the Saudi Arabian government to build and operate its manufacturing facility in the country. The Saudi Government has taken a majority stake holding in the company through its  PIF (Public Investment Fund).

• In 2022, the Saudi government committed to purchasing up to 100,000 vehicles over a ten-year period from Lucid, with an initial commitment to purchase 50,000 vehicles and an option to purchase up to an additional 50,000 vehicles over the same period.

• The order quantity will range from 1,000 to 2,000 vehicles annually and increase to between 4,000 and 7,000 vehicles annually starting from 2025 to be built and assembled at both Lucid’s Arizona and the Saudi factories.

• In October 2022, Lucid Motors announced the opening of its first Studio in the Middle East, located in Riyadh’s Al Nakheel District. The vehicles at the studio are being manufactured in California.

• The Saudi factory is being developed in KAEC’s ‘Industrial Valley,’ close to King Abdullah Port along the main Red Sea trading corridor, an area which has handled more than a third of Saudi Arabia’s Western Region container volumes.

• Lucid plans to establish operations at KAEC for the re-assembly of Lucid Air vehicles that are pre-manufactured at the company’s U.S. AMP-1 (Advanced Manufacturing Plant 1) Manufacturing Facility in Casa Grande, Arizona, and, over time, for production of complete vehicles.

• At its peak, the company expects to manufacture up to 155,000 vehicles per year at the KAEC facility. The vehicles built there would be for the domestic Saudi market initially but would also be exported to other markets later on. The new facility in Saudi will be called  AMP-2 (Advanced Manufacturing Plant 2).

Hyundai

Canoo

Canoo is an American automotive company that develops and manufactures electric vehicles. In Jan 2023, Saudi company GCC Olayan, the distributor of Scania trucks in the country, tied up with Canoo for the sale, distribution, service maintenance and repair of Canoo vehicles.

Avass Group

In Feb 2022, Australia’s Avass Group (a subsidiary of the DFT Group Pty Ltd) signed an agreement with the Saudi Government to manufacture lithium batteries and electric buses within Saudi Arabia. The group is headquartered in Melbourne and has a presence in India, Singapore, Indonesia and Saudi Arabia.

Avass is viewing India as a key base to manufacture a range of fully electric vehicles, including buses, cars, motorcycles and batteries, and believes that the agreement with the Saudi government will also greatly assist the trade relationship between Saudi Arabia and India.

The Avass Touring Bus holds the Guinness World Record for an Electric Bus travelling more than 1,000 km on a single charge, and Avass is also the first Australian Electric Vehicle manufacturer to obtain a World Manufacturer ID (WMI).

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EV Manufacturing and Sales Forecast

Electric Vehicles Manufacturing Forecast

Annual BEV production capacity in the pipeline (by 2030):

• Lucid Motors: 155,000 units per annum | Expected to produce 4 models of BEVs

• CEER Motors: 150,000 units per annum | Expected to produce several BEV models, including sedans and SUVs

• Unnamed upcoming project: 50,000 units per annum

KSA total production capacity by 2030  ~ 310,000 vehicles per annum

• The Saudi Industrial Development Fund estimates that the country will have a total EV production capacity of  ~ 310,000 vehicles per annum by 2030 led by Lucid Motors and CEER Motors.

• In total, 10 different models of BEVs are expected to be rolled out by 2027.

Electric Vehicles Sales Forecast

• According to the Saudi Industrial Development Fund, the conservative forecast of electric vehicle market share in 2030 would be 10% of total automotive sales (ICE+EV) in Saudi Arabia.

• The optimistic estimate of EVs as a part of new car sales is 25% by 2030.

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Regulations and Guidelines

SASO Technical Regulations for Electric Vehicles

The Saudi Standards, Metrology and Quality Organization (SASO) had disallowed the import of EVs in 2017, awaiting the issuance of the then pending SASO Regulations for Electric Vehicles. The subsequently published regulations, called the Technical regulations for Electric Vehicles (updated in November 2020) apply to all electric vehicles with a maximum Gross Vehicle Weight of up to 3500 kg and a top speed of more than 25 km/hour. These regulations were influenced by the EV frameworks of other countries, with particular emphasis on the regulations implemented by the United Arab Emirates concerning the sale and utilization of EVs. The regulations apply to electric vehicles placed in KSA, whether manufactured inside KSA or outside it.

The regulations mainly cover ensuring compliance with SASO regulations, monitoring compliance along the life of the EV, granting conformity certificates required for EV deployment in Saudi Arabia, and ensuring health & safety mechanisms concerning EV usage and charging. A wide array of standards for charging, connectors and sockets, environmental testing, vehicle performance, safety, internal cabling and batteries technologies are defined in the SASO regulations for EVs. The detailed guidelines can be accessed here.

Important Takeaways:

• Supplier responsible for placing the electric vehicles in the market shall obtain a Certificate of Conformity in accordance with the conformity assessment model (Type Approval).

• The electric vehicles shall have indicators to distinguish the EVs from other vehicles (non-electric) on more than one side of the vehicle. This is to facilitate their identification by the competent authorities for safety purposes.

• The maximum distance that may be covered by the electric vehicle (in one charge) shall not be less than 200 km.

• Market Surveillance Authorities shall check the vehicles in the market and stored in warehouses in order to check the safety of the product and the extent of fulfilment of the stipulated requirements.

It is prohibited to import charging equipment deviating from the standard specifications. Additionally, the standards for plugs and socket-outlets as outlined by the SASO, are as follows:

Regulations for rollout of EV Charging Stations

In 2022, the Saudi Electricity Company (SEC) released the detailed procedure for the installation of charging stations and announced the start of receiving consumer requests to install electric chargers for personal and commercial consumersthrough SEC’s service ‘Electric Vehicle Charging Gate‘.

Detailed documents can be accessed here.

“The Government has laid a good background for EV charging infrastructure deployment in the KSA. Several private sector companies are now eyeing this opportunity across the EV charging infrastructure value chain. So far, the Ministry of Energy and the Saudi Electric Company (SEC) has refrained from setting a public EV charging tariff.”

– Kanv Garg, Market Expert, eMobility and Charging Infrastructure and Ex-Strategy Director, Electromin

EV Charging Modes

For conductive EV charging, Saudi Standards, Metrology and Quality Organization (SASO) has adopted Standard IEC 61851-1 as a Saudi Standard with national modifications.

For single-phase EV charging, power is limited to 3.7 kVA, 16A. For 3-phase charging, the power is limited to 44 kVA, with a maximum current rating of 63A at 400V.

• Mode 1 charging directly from the regular household outlet is prohibited in the Kingdom due to safety concerns. In accordance with the latest updated version of the SASO IEC 61851-1, this mode is completely prohibited in KSA.

• Mode 2 AC charging with the provision of In-cable control and protection is allowed for residential use, limited to the single-phase 230V – 16A.

• Mode 3 AC charging and Mode 4 DC charging with EVSE (Electric Vehicle Supply Equipment) are approved for quicker charging options.

• DC charging (Mode 4) is meant for public and commercial charging purposes. The connector pins have to be rated for currents above 100 A.

Regulatory Framework for EV Charging

In 2020, the Water & Electricity Regulatory Authority released a regulatory framework for EV Charging with an aim to specify the regulatory requirements that must be complied with when installing Electric Vehicle Charging Stations or Equipment. Another goal of the framework is to ensure the effectiveness and safety of Electric Vehicle Charging Equipment. The detailed document can be accessed here.

Important Takeaways:

• If the Electric Vehicle Charging Stations or Equipment are not connected to the Distribution Network, then their owners or operators are not required to comply with the norms.

• Owners or operators of Electric Vehicle Charging Stations or Equipment are prohibited from supplying electricity to such stations or equipment through the use of mobile electric power generation units.

• It is prohibited for those licensed to engage in the activity of electricity distribution and retail sale, or any institution associated therewith, to engage in the Electric Vehicle Charging Activity.

• Operators of EV Charging will not require obtaining any license as such.

• Contractors wishing to install Electric Vehicle Charging Stations or Equipment shall obtain the necessary qualification from the Distribution Service Provider before starting any works related to this activity.

• As of today, Charging Service rates are not subject to regulation and are left to the market in order to be determined. However, the government might step in to set an upper limit on the price of EV charging services.

Requirements for EV Charging Locations

The Ministry of Municipal and Rural Affairs and Housing (MOMRA) has specified technical requirements for EV charging with the objective of ensuring a clean environment along with adequate safety while the vehicles are being charged. The complete document can be accessed here.

MOMRA classifies EV charging locations into 3 categories, depending upon the duration the vehicle is expected to be parked, and necessitates a 5% allocation for EV charging in all these locations:

• Installation of charging equipment is prohibited near water bodies or irrigation works, places with insufficient light or with a risk of traffic obstruction.

• Sufficient space has to be ensured to avoid the collision of vehicles with charging equipment or with surrounding sidewalks.

• Distinctive signage for directions and covering open areas of the charging equipment needs to be ensured.

• Charger usage instructions have to be in English along with Arabic, and the floor of each charging station must be marked in green along with a sign indicating it without using vertical plates or signs.

• Necessary systems must be in place for prevention and protection from fire as per the Saudi Code for fire protection (SBC801).

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EV Charging

EV Charging Infrastructure Updates

Electromin is the e-mobility business unit of Petromin, the Saudi Arabian lubricant manufacturer and automotive service provider. The biggest player in the Saudi Arabia EV charging space, Electomin, announced the rollout of its national public EV charger network at 100 locations across the Kingdom. The Charge Point Operator (CPO) aims to establish a nationwide EV charging network for electric vehicles in Saudi Arabia. Electromin provides turnkey offerings for private individuals, businesses, and governments in the Middle East.

Siemens secured an order to supply its ultra-fast Sicharge D chargers and VersiCharge AC wall or pole-mounted units to Electromin’s planned charging network in Saudi Arabia.  Sicharge D 160 kW and 180 kW fast charging solutions will be installed on the highways of the regions in Ras Al Khaimah, Ajman, Umm al-Quwain and Fujairah.

Electromin has also signed a partnership agreement with TAWAL, the leading integrated ICT infrastructure provider in the Kingdom,  to deploy charging stations by taking advantage of the towers owned by Tawal throughout the Kingdom.

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Minerals Exploration

EV Metals

In Dec 2020, Saudi Arabian government’s industrial investment attraction organization, National Industrial Development Centre (NIDC), signed an MOU with EV Metals Group (EVM), a global battery materials and technology company from Australia, for the development of a Battery Chemicals Complex. For this, in Jan 2023, EV Metals Group was allocated 127 hectares of land in Yanbu Industrial City.

The EV Metals Group produces chemicals required for cathode active materials of lithium-ion batteries. The group has offices in Australia, Saudi Arabia and the UK.

The complex will produce high-purity chemicals containing lithium, nickel, cobalt, manganese and other metals for high-energy-density cathode active materials. According to plans, the commissioning of the first two trains of LHM (lithium hydroxide monohydrate) will begin in 2026 and ramp to an annual production capacity of 50,000 TPA. This will be followed by an additional four trains, taking the total production up to 150,000 TPA of LHM. The first two trains of LHM are expected to bring in an initial investment of $800 million.

EVM Arabia has received a gas and power allocation equivalent to a daily standard amount of 6.24 million cu ft, which will be used for the first two processing trains in the Lithium Chemicals Plant. EVM has also signed a front-end engineering design agreement with Wood Group subsidiary Mustang and Faisal Jameel Al Hejailan Consulting Engineering Company. Mustang will develop the first two processing trains for the production of LHM. According to an S&P Global report, the two processing trains require 330,000 mt/year of spodumene concentrate containing 6% lithium oxide to produce 50,000 TPA of LHM.

EVM intends to accelerate the exploration of critical minerals in Saudi Arabia in 2023 through its subsidiary RIWAQ Al Mawarid for mining to develop a localised Saudi supply chain for the Battery Chemicals Complex. The company claims to have already been granted 11 exploration licenses covering 1,093 sq. kilometres and has 142 applications for exploration licenses with an area of 11,350 sq. kilometres in the process.

Also, in Jan 2023, EV Metals Group launched the Australian Lithium Alliance, a strategic initiative to partner with Australian companies to accelerate the exploration, development, mining, processing and production of Lithium Minerals. The alliance aims to provide an alternative to Chinese companies that currently dominate the purchase of spodumene concentrate from Australia. EVM also entered a JV with Australia-based Zenith Minerals Limited to explore for, mine and process mineral resources containing lithium and other battery metals in January 2022.

The Battery Chemicals complex in Saudi Arabia will cater to both the mid-stream and downstream processing of the chemicals.

Ivanhoe Electric

Ivanhoe Electric, an American mining company, has recently announced a 50/50 JV with Ma’aden, a leading Saudi Arabian mining company. The JV will focus on mining minerals critical for energy generation in the kingdom. Ma’aden will invest USD 126.4 million in Ivanhoe Electric for a 9.9% stake in the company, and the latter will contribute USD 66 million to the JV. The newly formed company will look to mine battery metals such as copper, nickel and lithium, along with gold, silver and iron ore.

Ma’aden will open up the landmass it has in Saudi Arabia for mining to Ivanhoe Electric, and the latter will put its proprietary technology called Typhoon to use for surveying and identification of mineral bedrocks that lie beneath the Saudi land. Typhoon-powered machines claim to detect minerals buried up to 1.5 kilometres below ground.

Lithium Infinity (LIHYTECH)

Saudi Arabian startup Lithium Infinity, which has patented a membrane-based lithium extraction technology, has raised $6 million from Ma’aden, the Saudi Arabian mining company, and KAUST (King Abdullah University of Science and Technology) Innovation Ventures. Ma’aden leads the investment with $4 million, and KAUST Innovation Ventures is investing $2 million.

Reportedly, the technology can extract alkali metal from a variety of sources, including seawater, brine, red mud, and others, and is developed by Professor Zhiping Lai at KAUST. Prof. Lai claims that they have found a way to make lithium extraction both technically and economically feasible. Lihytech’s extraction technology envisions becoming a significant addition to the Kingdom’s capability in the mining and securing of upstream critical raw materials for the development of EV and Energy Based Storage Systems.