Saudi EV buyers have Tesla as choice - how soon before more Chinese brands join in?

Dubai: More Saudi car buyers are in the mood to give EVs a chance with more dealerships in the Kingdom set to announce tie ups with leading Chinese carmakers to speed up the process.  

After what seems like a long gestation period, Tesla finally opened its first outlet in April, while Saudi-backed luxury EV brand Lucid Motors has done some of the preparatory work in creating a conducive environment for non-fuel automotive options.

But as happened in UAE, a range of Chinese-made EVs are set to be introduced in the Gulf’s biggest car market over the coming months. (In the UAE, more than 10 Chinese EV brands made their debut starting late 2023/early 2024 and until now, and many of them have started to pick up buyer backing for them.)

By end 2024, new car registrations of EVs in the UAE made up around 4%-5%, according to estimates – in Saudi Arabia, it was 1% of new car sales.

“Saudi banks are starting to offer favourable EV auto financing options, and dealers are working with insurers to come up with buyer-friendly packages,” said a dealer source. “The UAE auto market created the blueprint to launch and push new EV brands. It can easily be replicated in a market like Saudi Arabia.”

The Saudi car market is expected to account for 600,000 plus units a year by the end of the decade. If EV sales can make up 10%-15% by then, the game is on, say auto analysts.  

“The EV penetration in Saudi Arabia is relatively low compared to UAE,” said Vishal Pandey, Director of Dubai-based Glasgow Consultancy Group. “However, given the emphasis from Saudi Government on electrification, there is high likelihood that growth is going to be faster.

“There is still a perception issue among Saudi consumers in regards to EVs, as they are concerned about the high cost of acquisition, charging infrastructure, and the after-market service. Plus, there is also the resale value.”

When it comes to resale value, the situation in the UAE car market is very much in the formative stages. But the level of after-market service has definitely picked up in the last 12 months, even though most of it is straight from the official dealers. A network of independent service and repair facilities for EVs is still some distance away.

In Saudi Arabia, the plan is to accelerate each of the processes – getting people interested in EVs, make them buy and offer optimum after-sales backing.

"While the number of electric vehicles on the road is fairly small, we are seeing this change quite rapidly," said Mohammad Bakr Gazzaz, CEO of EVIQ, one of the big names in creating an EV charging network in Saudi Arabia.

"Through the rapid development of a reliable and accessible fast charging network across Saudi Arabia, we are addressing one of the biggest barriers to adoption - infrastructure availability.

“We’ve seen a number of global EV pure play players - BYD, Tesla and Lucid - make their debut in the Kingdom. Traditional manufacturers such as Mercedes and BMW are today offering their customers their full line of EVs.”

Gazzaz also points to the launch of Saudi Arabia's own EV brand - CEER Motors - by end of this year. According to auto Industry sources, the sheer novelty of a domestic car brand will create the buzz, and If the pricing proves competitive, CEER can get in a lot of buyer interest.   

CEER is a joint venture between Saudi wealth fund PIF and the tech giant Foxconn.

"If CEER manages to bring out models at certain price points, that will make a significant difference to how fast the adoption of EVs will be in Saudi Arabia," said an analyst.

As for Gazzaz and EVIQ, having the right models for car buyers is only one-half of it. There is also the need to create the charging networks, and in a market like Saudi Arabia as many as is needed.

"We have a robust expansion plan in place for the upcoming year, which will include another two upcoming highway routes - Riyadh-Dammam, and Mecca-Madinah," said Gazzaz.

"That's in addition to our plans for further expansion on the Riyadh-Qassim route. Our plan includes the introduction of fast charging stations in high-density city centers, strategically placed in key locations to integrate seamlessly with daily commutes."