Region on the cusp of EV production boom
2 August 2024
Energy and economic diversification programmes, not to mention ambitious industrialisation plans, have spurred investments in domestic battery electric vehicle (EV) manufacturing and assembly.
As of July, in Saudi Arabia and the UAE there were at least seven projects related to the construction of EV manufacturing and assembly plants, and two schemes for facilities that will assemble or manufacture hydrogen-powered vehicles. These projects have a total combined capacity of close to 400,000 vehicles annually.
Those setting up their manufacturing and assembly lines in the Gulf states plan to produce EVs for domestic as well as export markets, mainly in Africa.
Each manufacturer targets a defined segment of the evolving market, from entry-level to high-end passenger vehicles and electric trucks.
Saudi sovereign wealth vehicle, the Public Investment Fund (PIF), is a partner and investor in three of these brands: US-headquartered Lucid Motors, Saudi Arabia's Ceer and South Korea’s Hyundai.
Construction work is under way for the SR5bn ($1.3bn) first phase of Ceer’s 170,000 vehicles-a-year production plant in King Abdullah Economic City (KAEC) in Jeddah.
Ceer is a joint venture of the PIF and Taiwan-based Hon Hai Precision Industry Company, which is also known as Foxconn.
Lucid Motors aims to capture the high-end market and is also building its first assembly plant in KAEC, targeting a production capacity of 5,000 cars a year. This will be expanded to 150,000 from 2025 to support the kingdom’s goal of producing 500,000 EVs, and for EVs to account for 30% of new car sales in Saudi Arabia, by 2030.
“We will be expanding rapidly into the other GCC states as well,” a Riyadh-based executive with the California-based EV startup tells MEED.
He says constant and rapid innovation, particularly in terms of battery and charging technologies, will likely provide the tipping point for many consumers to shift from internal combustion engine (ICE) vehicles to EVs.
“Our fast charger today requires no more than 12-13 minutes to get you 300 kilometres. This means you may need to charge your car only once a week for city driving.
“The Lucid Air Sapphire is also one of the most powerful sedans in production today, capable of hitting 100 kilometres an hour in around 2 seconds,” he adds.
In search of lithium
Today’s EVs run on lithium-ion batteries, and Australia, Chile and China dominate global lithium production. As such, securing a global supply chain for locally manufactured EVs has become a top priority for Saudi Arabia.
The kingdom’s Industry & Mineral Resources Minister Bandar Al-Khorayef travelled to the Chilean capital of Santiago in late July to meet with several ministers of the world’s second-largest lithium producer to discuss ways to bolster cooperation in the industrial and mining sectors and lithium production.
Alkhorayef also met with Ruben Alvarado, the chief executive of Chile’s main copper producer, Codelco, to discuss investment opportunities in mineral production, particularly lithium and copper.
According to industry experts, the potential deals that Alkhorayef planned to secure might not necessarily involve importing lithium from Chile to Saudi Arabia. Rather, they could pertain to Saudi Arabia wanting to establish an integrated vertical supply chain for industries that it plans to build that require the mineral.
Notably, Saudi Arabia is also exploring domestic lithium production.
Saudi Arabian Mining Company (Maaden) has undertaken a pilot project that successfully extracted lithium from seawater, although not at commercially viable levels.
In July, Maaden signed an agreement with US-based Ivanhoe Electric to explore the Arabian Shield zone in Saudi Arabia – which is approximately the size of Switzerland – for high-demand minerals, including lithium.
Australia-headquartered EV Metals Group has also announced the completion of an initial exploration programme at the Balthaga lithium project in Saudi Arabia. The project is located 450 kilometres east of Jeddah in the south-east of the Arabian Shield.
Demand drivers
In addition to clear regulations, factors such as price competitiveness, a wider variety of EV models and innovative ownership models will be crucial in driving demand across the region, according to experts.
A study by global consultancy PwC suggests that there are just 56 EV models available in the UAE in 2024. This is equivalent to 7% of the total, with 731 ICE and hybrid models accounting for the rest.
This is in contrast to the trend in Europe, where there are 264 EV car models comprising 26% of the total. This ratio is expected to nearly triple to 71% by 2030.
“Consumers want what they want, not just what’s available,” says a senior business development executive with a UAE-based car distributor. “The younger consumers also do not want to own cars, they prefer a subscription model, so we need to cater to these requirements.”
Manufacturers and their local partners appear to be heeding these sentiments. Distributors in the UAE for leading brands including Tesla and BYD have launched car lease programmes, which allow consumers to make monthly payments over a fixed period, at the end of which they return the EV to the supplier.
This scheme suits consumers that want to upgrade their cars every few years and prefer the convenience of separate insurance and maintenance bills.
Major investments in local EV production, such as those being made in Saudi Arabia and the UAE, can also help to guarantee a greater variety of car models that are designed to cater to local preferences, weather and purchasing power.
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Reconstruction needs
Nearly a decade after the official end of the Islamic State conflict, Iraq’s reconstruction gap remains substantial. Estimates put the shortfall at about $88bn, reflecting the long tail of damage to housing, utilities, public buildings and transport links. Southern and central regions dominate the live pipeline, largely because they sit close to Iraq’s oil heartlands. Basra, in particular, is pivotal, anchoring major upstream activity and vital export infrastructure.
At the policy level, Iraq Vision 2030 signals a long-term ambition to diversify into tourism, agriculture, industry and digital transformation. The government’s immediate delivery vehicle is the National Development Plan (NDP) 2024-28, which commits more than $17bn a year in capital expenditure and prioritises energy, transport, housing and water infrastructure. This shift is reinforced by Iraq’s Green Growth Framework (2026), indicating that future procurement may place greater weight on efficiency, emissions reduction and climate resilience.
Macro risk
Despite policy ambition, the most immediate determinant of Iraq’s fiscal room is the oil price. A $10-a-barrel drop can reduce government revenue by an estimated $7bn-$9bn annually. Such sensitivity matters because infrastructure spending is still largely funded by the public purse. Oil price swings affect project awards, payment cycles and the government’s willingness to assume up-front capex obligations.
Iraq’s execution environment continues to be defined by bureaucratic delays, unclear land titles and opaque procurement processes. These factors can add 12-24 months to average delivery timelines. Nevertheless, there are signs of adaptation. PPP legislation is advancing, and developer-led models are gaining traction in large housing programmes. Furthermore, there is a growing reliance on international project management consultancy (PMC) firms—such as Hill International, Worley, and AtkinsRealis—to bridge capacity gaps and improve governance, cost control and scheduling.
Hydrocarbon driver
Oil and gas upstream remains the single largest driver of capital expenditure. Major developments, including the Gas Growth Integrated Project (GGIP) and Mansouriya, sit alongside a push to reduce gas flaring and expand downstream processing. The objective is to sustain export revenues while improving domestic fuel availability.
The power sector is even more urgent. Iraq faces an estimated 8-10GW generation shortfall, which keeps electricity supply at the centre of political risk. This gap is driving rapid procurement of generation capacity and grid upgrade contracts. Beyond traditional infrastructure, Iraq is also moving on digital adoption. Smart city pilots and fibre rollouts are attracting regional technology investors, while AI-enabled data centre projects are beginning to emerge.
Investment targets
Foreign direct investment (FDI) remains below $3bn a year, a low figure relative to market size. The most active investors outside the oil sector include the UAE, Saudi Arabia and Kuwait. To convert interest into deals, the National Investment Commission (NIC) is pursuing streamlined licensing and investor-protection reforms. A “one-stop shop” approach has reportedly reduced registration timelines for foreign investors from months to weeks in key sectors.
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Conflict premium
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Qiddiya seeks firms for light rail transit system11 May 2026
Saudi gigaproject developer Qiddiya Investment Company (QIC) has requested contractors to express interest in a contract to design and build the first phase of the light rail transit system at Qiddiya Entertainment City.
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Contractors submit bids for Saudi gas processing plant project8 May 2026
Contractors have submitted bids to Saudi Aramco subsidiary Aramco Gulf Operations Company (AGOC) for a project to build an onshore gas processing plant in Saudi Arabia’s Khafji that will draw and process gas from the Dorra offshore gas field, located in waters of the Saudi-Kuwait Neutral Zone.
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Contractors were initially set deadlines of 24 October for technical bid submissions and 9 November for commercial bids. AGOC later extended the bid submission deadline to 22 December, and then until 22 April. A final deadline of 30 April was set, with contractors submitting bids by that date, according to sources.
The seven EPC packages cover works including open-art and licensed process facilities, pipelines, industrial support infrastructure, site preparation, overhead transmission lines, power supply systems and main operational and administrative buildings, with their breakdown as follows:
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Dorra field facilities project
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KGOC onshore processing facilities
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In February 2024, Kuwait and Saudi Arabia reiterated their claim to the Dorra field in a joint statement issued during an official meeting in Riyadh between Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah and Saudi Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.
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READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16734353/main5834.jpg -
Teams prepare bids for Riyadh East sewage treatment plant8 May 2026
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That same month, the Miahona-led consortium was selected as preferred bidder for the Arana ISTP and the Metito-led consortium was selected as the reserved bidder. Both projects have yet to reach financial close.
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Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
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Saudi Arabia tenders Jeddah-Mecca highway PPP8 May 2026
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The tender was issued on 19 April, with a bid submission deadline of 19 August.
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Under the MSA component, the company will develop, permit, finance, design, engineer, procure, construct, complete, test, commission, insure, operate and maintain three MSAs along the highway.
The contract term is 25 years, including two years of the construction period.
Each MSA plot will cover 34,500 square metres and will include facilities such as fuel stations, electric vehicle charging, truck services, tyre and oil change, car wash and repair, retail and food outlets, ATMs, restrooms, mosques, parking, landscaping and other associated utilities.
The highway services component will include insurance, operation and maintenance of highway assets for 10 years.
The 64-kilometre (km) Jeddah-Mecca highway has four lanes in each direction. The construction works on 51km are complete, while the rest is under construction and scheduled for completion in 2027.
In March, the RGA and NCP prequalified three bidders to develop the project. These were:
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- Lamar Holding / Shaanxi Construction Engineering Group Corporation (Bahrain/China)
- Mada International Holding (local)
The expression of interest notice for the project was first issued in October 2024, as MEED reported.
The project is one of four planned highway schemes in the kingdom’s privatisation and public-private partnership (P&PPP) pipeline.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16731199/main.jpg