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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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.
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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.
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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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The latest escalation involving the US and Israel with Iran has increased Iraq’s security risk premium. This is inflating materials costs and disrupting supply chains near eastern border zones. Even where projects are far from conflict areas, contractors are pricing in higher contingency for logistics and insurance. Iraq must also balance deep economic ties with Iran—particularly in energy—with Western investor expectations and sanctions-related compliance.
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Retal to develop project in Oman’s Sultan Haitham City
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Qiddiya seeks firms for light rail transit system
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RCRC awards $1bn Sheikh Jaber Al-Sabah Road contract
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Saudi Arabia’s Royal Commission for Riyadh City (RCRC) has awarded an estimated SR5bn ($1.3bn) contract for the construction of the Sheikh Jaber Al-Sabah Road project in Riyadh.
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Aecom to supervise Dubai Loop construction
11 May 2026
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US-based Aecom has been selected for a contract to undertake design review and construction supervision services for the Dubai Loop transportation system.
The contract was tendered by Dubai’s Roads & Transport Authority (RTA), which signed a construction agreement with Elon Musk-backed firm The Boring Company.
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