RIYADH — In a country traditionally known for its vast deserts and oil wealth, a new trend is emerging on Saudi roads: electric vehicles (EVs). The Saudi government’s push towards diversifying its economy and reducing its reliance on oil is driving a small but growing EV market, transforming the automotive landscape in the Kingdom.

Hamed Al Rafidain, a 39-year-old human resources worker, represents a shift in consumer behavior. Al Rafidain recently invested in an electric vehicle, opting for a BYD model which he primarily uses for short trips within Riyadh. His decision was motivated by both financial considerations and environmental concerns.

“Buying an electric vehicle was driven by financial considerations,” Al Rafidain said. “I was spending up to 2,000 riyals ($530) a month on fuel for my off-road vehicle. Maintenance costs are also lower compared to a conventional vehicle, with no oil changes and no brake-pad replacements.”

Al Rafidain’s choice is reflective of a broader trend among Saudis who are increasingly considering EVs despite the current market challenges. The EV market in Saudi Arabia has indeed been growing, albeit from a low base. According to Al-Iqtisadiyah, the number of electric cars sold in the Kingdom tripled last year to nearly 800 units.

Despite the growth, the EV market in Saudi Arabia remains relatively small compared to major players like the United States and China. However, the Kingdom’s ambitions to become a hub for EV technology are evident, especially given its recent investments and partnerships in the sector.

Chinese EV giant BYD is expected to play a significant role in the Saudi market, given its competitive pricing and broad range of models. Tesla, a leading global EV manufacturer, currently has no dealerships in the Gulf kingdom, leaving room for BYD and other brands to capture market share.

Al Rafidain noted the environmental benefits of EVs, stating that they “help reduce global warming in cities.” He purchased his BYD for just over $53,300, primarily for short-distance use within the capital. The challenge, he said, is the limited range of current EV batteries, which is approximately 400 kilometers (250 miles), making long-distance travel a gamble due to the still-developing charging infrastructure.

The lack of charging stations is a significant barrier to widespread EV adoption. While companies like BYD and Lucid are addressing this by installing charging stations at customers’ homes, the Electric Vehicle Infrastructure Company (Eviq) is working on expanding the network. The goal is to have 5,000 charging stations across the country by 2030.

Price remains another critical factor. In a country where fuel costs are low—$0.62 per liter—the higher price of EVs is a deterrent for many consumers. A Lucid vehicle, for example, costs around $92,000. However, the arrival of BYD and potentially other manufacturers is expected to make EVs more affordable in the near future.

Industry experts, such as Hossam Iraqi, highlight additional challenges. The current EV models are generally small to medium-sized, which may not meet the needs of larger Saudi families. Moreover, the extreme heat in the Gulf region can affect battery performance and efficiency.

Despite these challenges, there are optimistic signs for the future of EVs in Saudi Arabia. Salesman Hassan Mohammed, who spoke at a recent exhibition in northern Riyadh, anticipates strong EV sales this year. The growing presence of multiple car brands and the establishment of after-sales services are helping to boost consumer confidence.

According to Al-Iqtisadiyah, Saudi Arabia imported 779 EVs in 2023, up from just 210 the previous year. This increase in imports signals a growing acceptance and interest in electric vehicles among Saudis.

The Saudi government is also investing heavily in domestic production. The Public Investment Fund (PIF) now holds a 60% stake in Lucid Motors and has secured a deal with South Korea’s Hyundai to set up a plant in the Kingdom for both EVs and conventional vehicles. Additionally, the Saudi EV brand CEER, launched in 2022, plans to commence production in 2025.

Saudi Industry Minister Bandar al-Kharif has outlined ambitious goals for the sector, including the production of 300,000 EVs annually, though no specific timeline has been provided. Riyadh is also pursuing carbon neutrality by 2050, and discussions with battery producers are part of this broader strategy.

For some consumers, hybrid vehicles—which use both batteries and gasoline—remain a practical choice for longer journeys. Omar el-Shami, a 43-year-old Egyptian pharmacist, purchased a hybrid vehicle for his wife, citing its economical and convenient balance between electricity and gasoline.

“Things may change in the future,” el-Shami said, reflecting the evolving landscape of the automotive market in Saudi Arabia.

As Saudi Arabia navigates this transition towards electric mobility, it faces both significant opportunities and challenges.

The Kingdom’s commitment to diversifying its economy and reducing carbon emissions positions it as a burgeoning player in the global EV market. However, addressing infrastructure needs and reducing vehicle costs will be crucial for accelerating widespread adoption.