Report Description

GCC Electric Vehicle Market is predicted to grow at 25.16% CAGR to reach USD10,684 million by 2028 due to increasing logistics and travel activities in the region.

GCC Electric Vehicle Market Overview

The GCC electric vehicle market is expanding as traditional vehicles are replaced with zero-emission vehicles. Furthermore, with rising pollution levels and the rising expense of fossil fuels, many GCC countries are shifting to green energy. Electric cars are the main technology for decarbonizing the road transportation sector, which accounts for 16% of all global emissions. According to the International Energy Agency (IEA), passenger electric cars are gaining popularity, and it is projected that 13% of new cars sold in the coming years will be electric. Electric vehicles are majorly classified into four categories based on their propulsion: BEV, HEV, PHEV. Due to its zero emissions, BEV, which is purely battery-reliant, is becoming more and more popular. HEVs have internal combustion engines that are supplemented by one or more electric motors that draw power from batteries that cannot be charged separately. IC engines and battery-powered motors are used independently to power PHEV electric vehicles.

GCC Electric Vehicle Market Drivers

Increasing Adoption and Government Support

Due to their low operating costs and decreased carbon impact due to absence of emissions, electric vehicles are becoming more and more popular in the GCC region. Several governments are launching a number of projects and programs to encourage green mobility all around the region. In addition, as oil costs have risen, so has the desire for electric cars. By offering tax breaks and incentives, the governments of the GCC region are encouraging the use of electric vehicles. Also, the infrastructure for charging electric vehicles is rapidly developing in many GCC nations. As a consequence, charging has become effective and range anxiety has minimized among consumers. Additionally, while demand is rising significantly, many firms are increasing their manufacturing capacity and dealership network across GCC countries. Owing to this, it is anticipated that GCC electric vehicle market will grow at considerable rate by 2028.

GCC Electric Vehicle Market Challenge

Underdeveloped Aftermarket Services

The automotive aftermarket has had ups and downs in performance over the last two years as a result of the pandemic, as with all industries.  Furthermore, due to a declining customer base, a reduction in vehicle miles travelled (VMT), and consumers' lower purchasing power, the demand for automotive aftermarket products has decreased resulting in slower adoption of vehicles in the region. Also, during the COVID pandemic, several automotive manufacturers delayed the assembly of their vehicles due to part shortages, particularly microprocessor shortages, which slowed the expansion of the electric vehicle sector. Overall, it is anticipated that the growth rate of electric vehicles in the GCC will be sluggish in the early years due to the considerations mentioned above.

GCC Electric Vehicle Market Trend

Emerging New Players in the Market

The demand in the GCC for more advanced electric vehicles is growing as the automotive sector develops quickly. Furthermore, to meet the growing demand, numerous manufacturing businesses made investments in vehicle manufacturing and charging infrastructure industry's research and development over the period of the few years. Additionally, new players, including startups and established automakers, are entering the GCC EV market and launching cutting-edge, novel EV models, collaborating with local battery manufacturers, service providers to establish their business. For instance, in 2021 the GCC region saw the introduction of the Lucid Air, a luxury electric automobile from Saudi startup Lucid Motors. As a result, new technologies are adopted, which will increase the GCC Electric Vehicle Market during the forecast years.

Recent Developments

For the next ten years, Saudi Arabia plans to invest over USD 50 billion in the production of electric vehicles.

In 2022, Saudi Arabia announced a USD 6 billion investment in a steel plate mill complex and an EV battery factory. Saudi Arabia also inked a contract with Lucid Group Inc. to buy 50-100,000 electric vehicles over a 10-year period.

In 2022, The Khalifa Industrial Zone Abu Dhabi (KIZAD) of AD Ports Group inked a contract to develop an electric car assembly facility in Abu Dhabi with the Chinese electric vehicle manufacturer NWTN.

Market Opportunities

The rising commercial activities in many countries in GCC region have increased the sales of electric vehicles. In addition to rising sales, development of smart and sustainable battery management systems further boosts the market in coming years. The rapid penetration of electric vehicles provided manufacturers more opportunities to diversify their product offerings. Additionally, the region could benefit from the global transition to electric vehicles, which would improve advanced battery technology in electric vehicles. Because of the aforementioned factors, there are many opportunities for manufacturers and suppliers to build distribution networks across the region to keep up with rising demand in upcoming years.