Saudi Arabia: Pushing Ahead with Charging Infrastructure Development
Despite being the world's largest petroleum-producing country, where local gasoline prices remain extremely low, Saudi Arabia has entered the EV market in recent years. The country has been investing heavily to establish a comprehensive industrial chain, reflecting a strategic shift in its economic focus.
This initiative is driven by multiple objectives. On one hand, it aligns with the pursuit of sustainable economic and social development, aiming to diversify its economy away from its heavy reliance on oil. On the other hand, it is a justified move to capitalize on the vast opportunities presented by the trillion-dollar EV industry.
With the global automotive industry rapidly transitioning towards electrification, Saudi Arabia is aware of the potential of this trend. By accelerating its strategic layout in the EV sector, the country hopes to become a prominent player in the global market of green mobility and clean energy.
According to the "Vision 2030" strategy, Saudi Arabia is investing billions of dollars to build infrastructure, promote advanced technology research and development, and promote the localization of tram supply chain. The Saudi government plans to electrify 30% of the cars in the capital Riyadh by 2030, and strive to build a complete electric vehicle ecosystem.
Large-scale investment in industrial chain layout
In recent years, Saudi Arabia has made frequent moves and invested heavily in the whole industrial chain from raw materials to vehicle manufacturing.
Heiko Seitz, head of PwC's global and Middle East electric travel business, pointed out that Saudi Arabia is building a self-sufficient automobile supply chain to consolidate its position in the global electric vehicle industry.
The Saudi sovereign wealth fund-Public Investment Fund (PIF) is the largest shareholder of Lucid Motors, a US-listed tram company, and has invested about 8 billion US dollars in it from 2018 to August 2024. In 2023, Lucid Group established a manufacturing plant in King Abdullah Economic City (KAEC) in Saudi Arabia, with an annual production capacity of 155,000 trams.
In 2022, PIF and Foxconn established Ceer Motors, the first local tram brand in Saudi Arabia, which is expected to create 30,000 jobs by 2034 and contribute about $8 billion to GDP. Its first trams are expected to be listed in 2026.
Seitz said that Saudi Arabia is also using its rich mineral resources to strengthen the supply of materials needed for key components.
In 2021, the Royal Committee of Jubail and Yanbu (RCJY) of Saudi Arabia developed a battery chemical complex in Yanbu Industrial City in stages, including a lithium chemical factory, a nickel chemical factory and a cathode active material factory.
In 2023, Ma‘aden bought 9.9% of Ivanhoe Electric for $126 million, and set up a joint venture to accelerate the development of Saudi copper, nickel, gold, silver and other strategic mineral resources.
Perfecting infrastructure and promoting industrial development
In the popularization of electric vehicles, the Saudi government is cooperating with private enterprises to establish a nationwide charging network. Mazin Jameel, director of market operation of Abdul Latif Jameel Motors, said that Saudi Arabia is establishing a public-private partnership model with leading technology suppliers, accelerating the construction of charging infrastructure, and promoting renewable energy projects, such as solar energy and wind energy, to provide clean energy for tram charging.
It is reported that Saudi Arabia plans to install 5,000 fast charging piles by 2030. Jameel also said that the Saudi government has also introduced a series of financial incentives and policy support to accelerate the promotion of trams. At the beginning of this year, Saudi Arabia introduced a "standard incentive plan" worth 10 billion riyals (about 2.666 billion US dollars), providing up to 35% initial funds for industrial projects such as automobile manufacturing and parts.
At the same time, Saudi Arabia is introducing artificial intelligence and automation technology into the automobile industry to optimize the production process, upgrade the digital infrastructure related to intelligent travel, and strive to widely apply intelligent technology to enhance the competitiveness of tram manufacturing.
Saudi Arabia is transforming from a traditional oil economy to a new energy industry and diversified economy. Through large-scale investment, technical cooperation and policy support, Saudi Arabia is expected to become an important participant in the global tram market.
