|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
USD
1.6 Billion
|
|
CAGR
(2023-2028)
|
5.95%
|
|
Fastest
Growing Segment
|
FCEV
|
|
Largest
Market
|
Northern
& Central
|
Market Overview
Saudi
Arabia Electric Commercial Vehicle Market has valued at USD 1.6 Billion in 2022
and is anticipated to project robust growth in the forecast period with a CAGR
of 5.95%. The electric commercial
vehicle (ECV) market in Saudi Arabia has been witnessing a transformative shift
in recent years, driven by a combination of government initiatives, increased
consumer awareness, and global sustainability trends. As the world's largest
oil producer, Saudi Arabia has long been synonymous with fossil fuel dependency.
However, recognizing the need to diversify its economy and reduce greenhouse
gas emissions, the Saudi government, through its Vision 2030 plan, has
committed to a sustainable future with a strong emphasis on electrification and
cleaner transportation. This has paved the way for the rapid growth and
development of the ECV market in the country. The Saudi Arabian government has
played a pivotal role in accelerating the growth of the ECV market by
introducing a range of incentives and support mechanisms. These initiatives are
aimed at reducing the initial purchase cost of electric vehicles, facilitating
the development of charging infrastructure, and encouraging ECV adoption among
individuals and businesses. One of the most significant government initiatives
has been the reduction of import tariffs and tax benefits for ECV manufacturers
and buyers. This has made electric vehicles more financially attractive,
helping to offset the higher initial costs associated with these vehicles. To
address one of the critical challenges in ECV adoption, Saudi Arabia has
invested heavily in expanding its charging infrastructure. A robust network of
charging stations is essential for the convenience and practicality of ECVs,
and the Saudi government is fully aware of this. The commitment to developing
charging infrastructure extends not only to urban centers but also to highways,
remote regions, and key travel corridors. As a result, range anxiety, which has
been a significant deterrent to ECV adoption, is gradually diminishing, making
electric vehicles more viable options for consumers and businesses. The
adoption of ECVs by commercial and industrial fleets is on the rise in Saudi
Arabia. Businesses operating in the country are increasingly realizing the
benefits of ECVs, both in terms of cost savings and their positive
environmental image. Electric vehicles offer substantial reductions in fuel and
maintenance costs over time, making them an economically sensible choice for
fleet operators. Moreover, the government's incentives and regulations have
made it financially advantageous for companies to integrate ECVs into their
fleets. Fleet electrification is an important trend as it not only reduces
emissions but also significantly shapes the ECV market by promoting mass
adoption.
One
of the most promising trends is the increased awareness and adoption of ECVs
among consumers. As more individuals become informed about the environmental
benefits of electric vehicles and their long-term cost savings, demand for ECVs
is on the rise. Consumer adoption is further boosted by the development of a
local market for used ECVs, which provides affordable options for a wider range
of buyers. This trend contributes to the growth of charging infrastructure,
creating a positive feedback loop for the ECV market. Saudi Arabia is actively
working on a comprehensive regulatory framework to support the growth of the
ECV market. This framework includes setting emission reduction targets,
defining emissions standards for vehicles, and establishing regulations for
charging infrastructure. The development of clear and favorable regulations is
essential to providing a roadmap for ECV adoption and ensuring the sustainable
growth of the sector. To bolster the ECV market, Saudi Arabia has been
collaborating with international ECV manufacturers. These partnerships include
technology transfer, investments, and the establishment of local manufacturing
facilities. These efforts aim to reduce the dependence on imported ECVs and
components while promoting local manufacturing, job creation, and the
development of a comprehensive ECV ecosystem.
The
integration of ECVs into innovative mobility solutions and ride-sharing
services is an emerging trend. Companies and startups are entering the market
to provide ECV-based ride-sharing and last-mile delivery services. This trend
aligns with the global shift toward shared mobility and presents an opportunity
for ECV manufacturers and service providers to tap into new revenue streams. It
can also lead to increased exposure and acceptance of ECVs among the public. Advancements
in battery technology are central to the growth of the ECV market. A notable
trend is the improvement in battery energy density, which results in extended
vehicle ranges. As battery technology evolves, ECVs can travel longer distances
on a single charge, reducing range anxiety and making electric vehicles more
practical for various applications, including long-haul transportation. This
trend is critical for the ECV market's competitiveness and acceptance.
Key Market Drivers
Government
Initiatives and Policies
Saudi
Arabia has shown a strong commitment to diversifying its economy and reducing
its dependence on oil. One of the key strategies for achieving this goal is to
promote sustainability and environmental responsibility, which includes
transitioning to electric mobility. The government has introduced several
initiatives and policies to boost the eCV market: Saudi Vision 2030 includes
plans for localization and reducing unemployment through Saudization. This
policy is expected to encourage local eCV manufacturing and assembly, creating
jobs and reducing import costs. The kingdom is actively promoting green energy
sources. As a part of the Saudi Green Initiative and the Middle East Green
Initiative, there's a push for cleaner energy sources, which is directly
related to the adoption of electric vehicles. The Saudi government offers
various incentives such as subsidies on electric vehicle purchases, reduced
taxes, and favorable financing options to encourage eCV adoption. These
government initiatives create a conducive environment for electric commercial
vehicle adoption and local production.
Environmental
Concerns and Sustainability
Saudi
Arabia faces environmental challenges, primarily related to air quality and
carbon emissions. The transportation sector, including commercial vehicles, is
a significant contributor to pollution. eCVs are considered an environmentally
friendly solution to combat these issues. Key factors include: The adoption of
eCVs can significantly reduce air pollutants, thus improving air quality, which
is a growing concern in cities like Riyadh and Jeddah. Reducing greenhouse gas
emissions is essential to meet international climate targets. Electric vehicles
produce zero tailpipe emissions, which is in line with global environmental
commitments. Sustainability is becoming a significant factor in business
decisions. Using eCVs can help companies project a more sustainable and
responsible image.
Advancements
in Technology
Technological
advancements in the eCV sector have made electric commercial vehicles more
practical and efficient. These include Continuous developments in battery
technology have increased the energy density and reduced charging times, making
eCVs more viable for commercial use. Improvements in range and performance have
made eCVs a competitive alternative to traditional diesel and gasoline
vehicles. The growth of charging infrastructure across Saudi Arabia, including
fast-charging networks along highways, is reducing range anxiety and making
eCVs more attractive to businesses.
Total
Cost of Ownership (TCO)
The
TCO of eCVs is becoming increasingly competitive when compared to traditional
internal combustion engine vehicles. Key factors contributing to this include: eCVs
have lower operating costs due to the lower cost of electricity compared to
gasoline or diesel fuel. They also have fewer moving parts, reducing
maintenance expenses. Though the initial purchase price may be higher, eCVs can
offer significant long-term savings, making them an attractive investment for
businesses. As businesses recognize the cost-saving potential, they are more
likely to invest in eCVs.
Consumer
Awareness and Demand
Increased
awareness of the environmental impact of vehicles and a growing preference for
sustainable alternatives are driving demand for eCVs. Factors influencing
consumer demand include large corporations are increasingly adopting
sustainability goals and incorporating eCVs into their fleets to reduce their
carbon footprint. E-commerce and delivery services are booming, and electric
commercial vehicles are well-suited for last-mile deliveries in urban areas due
to their low emissions and quiet operation.
Infrastructure
Development
The
growth of charging infrastructure is critical for the success of the eCV
market. Key aspects of infrastructure development in Saudi Arabia include: The
government and private sector have been investing in charging infrastructure,
making it easier for eCV users to charge their vehicles. Incentives for
businesses and investors to develop and maintain charging stations are helping
to expand the network.The integration of smart charging technologies allows for
better management of charging times and energy consumption, making eCVs more
efficient..
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Key Market
Challenges
Infrastructure
Development
One
of the most significant challenges for the eCV market in Saudi Arabia is the
lack of robust charging infrastructure. Key issues include: The availability of
charging stations, especially in rural and less-developed areas, remains
limited. The eCV market's growth is heavily dependent on the expansion of a
reliable and extensive charging network. Fast-charging infrastructure is
essential for eCV adoption, especially for commercial vehicles that need to
minimize downtime. The deployment of high-speed charging stations is still a
work in progress. Ensuring that charging stations are compatible with different
eCV models is a challenge, as the market sees a variety of vehicle types and
charging standards.
High
Initial Cost
The
upfront cost of eCVs is considerably higher than that of conventional vehicles.
Key factors contributing to this challenge are: Batteries are the most
expensive component of eCVs. Although battery prices are decreasing, the
initial investment is still a barrier for many businesses. A limited selection
of eCV models available in the Saudi market can limit choices and increase
prices due to lower competition. Overcoming the high initial cost is crucial to
driving eCV adoption among businesses.
Range
Limitations
Limited
driving range is a critical concern for eCVs, particularly for commercial
vehicles operating over long distances. Key points include: Commercial
vehicles, such as trucks and buses, often require long-range capabilities, and
current eCVs might not provide the necessary range without frequent recharging.
The fear of running out of charge before reaching a destination, also known as
range anxiety, is a significant psychological barrier for both consumers and
businesses. Developing eCVs with longer ranges and implementing effective
strategies to alleviate range anxiety is crucial.
Battery
Technology and Performance
Battery
technology plays a central role in eCVs, and several challenges are associated
with it: Although battery technology is improving, there's a need for higher
energy density to increase vehicle range and reduce battery weight. While
charging infrastructure is developing, faster charging times are still needed
to match the convenience of refueling traditional vehicles. Batteries degrade
over time, and their replacement is a significant cost. Extending the lifespan
of batteries is essential to reduce long-term ownership costs.
Limited
Vehicle Options
The
diversity of eCV models available in the Saudi market remains limited, which
poses challenges for businesses looking to transition their fleets to electric.
Key points include: There are fewer eCV options for specialized vehicles like
heavy-duty trucks and buses. Businesses often require specialized vehicles for
their operations, and limited availability can make it challenging to find eCVs
that meet their specific needs. Encouraging a broader range of eCV models and
customizations would enhance the market's attractiveness.
Regulatory
and Policy Hurdles
The
regulatory and policy landscape can both facilitate and hinder the eCV market's
growth. Key challenges include: The absence of well-defined regulations related
to eCVs can create uncertainty for consumers and businesses regarding vehicle
standards, emissions, and incentives. Import duties and taxes on eCVs can make
them more expensive compared to traditional vehicles, discouraging their
adoption. While there are incentives in place, their clarity and accessibility
can be improved to encourage more businesses to invest in eCVs. Navigating the
regulatory landscape and advocating for policies that favor eCVs is essential
for market growth.
Key Market Trends
Government
Initiatives and Support
The
Saudi Arabian government has been actively promoting the adoption of ECVs
through various incentives and support mechanisms. These initiatives include
financial incentives, reduced import tariffs, and tax benefits for electric
vehicle manufacturers and buyers. Additionally, the government has been
investing in charging infrastructure development to facilitate the widespread
use of ECVs. It is crucial to note that government policies and support
significantly influence market trends in the ECV sector.
Growing
Investment in Charging Infrastructure
One
of the most prominent market trends in Saudi Arabia's ECV sector is the
significant investment in charging infrastructure. To encourage the adoption of
ECVs, the country has been developing a comprehensive network of charging
stations, not only in major cities but also along highways and in remote areas.
This commitment to expanding charging infrastructure is a crucial trend, as it
addresses the "range anxiety" that potential ECV buyers may have. The
availability of convenient and reliable charging options is essential for the
growth of the ECV market.
Increased
Focus on Public Transportation Electrification
Public
transportation electrification is a notable trend in Saudi Arabia. The
government recognizes the potential for ECVs in reducing emissions and
enhancing the quality of life in cities. This trend includes the introduction
of electric buses and other forms of public transportation, such as trams and
commuter trains. Electrifying public transportation not only reduces emissions
but also sets an example for the private sector and individuals, encouraging
them to adopt ECVs.
Fleet
Electrification
Fleet
electrification, which involves the adoption of ECVs by commercial and
industrial fleets, is on the rise. Businesses in Saudi Arabia are increasingly
investing in electric commercial vehicles for several reasons. First, ECVs
offer significant cost savings over time due to lower fuel and maintenance
costs. Second, they contribute to a more sustainable image for companies, which
aligns with global sustainability trends and customer expectations. Finally,
government incentives and regulations have made it financially advantageous for
businesses to integrate ECVs into their fleets. This trend not only reduces
emissions but also plays a vital role in shaping the ECV market in the country.
Local
Manufacturing and Partnerships
There
is a growing trend toward local ECV manufacturing and partnerships with
international ECV manufacturers. As of 2021, most ECVs in Saudi Arabia were
imported, leading to high import costs and limited economic benefits for the
country. To address this challenge, Saudi Arabia has started to explore the
possibilities of manufacturing ECVs locally. This not only reduces costs but
also stimulates the domestic economy and creates jobs. Partnerships with
international automakers are also being formed, allowing for the transfer of
technology and expertise in ECV manufacturing.
Rising
Consumer Awareness and Adoption
Increased
consumer awareness and adoption of ECVs are key trends in the Saudi Arabian
market. As more individuals become informed about the benefits of ECVs, their
environmental advantages, and the cost savings they offer, the demand for
electric passenger vehicles and light commercial vehicles is growing. The
development of a local used ECV market is also expected to support consumer
adoption. The increase in consumer adoption can further stimulate the
development of charging infrastructure, creating a positive feedback loop for
the ECV market..
Segmental Insights
Propulsion
Type Insights
BEVs
are fully electric vehicles that rely solely on electric batteries for
propulsion. They do not have an internal combustion engine and produce zero
tailpipe emissions. BEVs are becoming more popular worldwide due to
advancements in battery technology and charging infrastructure. PHEVs combine
an internal combustion engine with an electric battery. They can run on
electricity for a certain range before switching to the internal combustion
engine. PHEVs offer flexibility for longer trips while reducing emissions
during short journeys. FCEVs use hydrogen as fuel and produce electricity
through a chemical process in a fuel cell to power an electric motor. They are
known for their longer range and quick refueling, but hydrogen infrastructure
can be limited in many regions. HEVs combine an internal combustion engine with
an electric motor. They are not plug-in and primarily use regenerative braking
to charge the battery. HEVs are a transitional technology toward full
electrification.
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Regional Insights
The
northern and central region dominate the market. Riyadh, being the capital and
the largest city, has a diverse range of commercial vehicles. Pickup trucks and
vans are prevalent, as they are used for delivery services, construction, and
transportation within the city. The region also has a substantial number of
buses for public transportation and tourism. Jeddah is a major port city, and
as a result, heavy-duty trucks and container haulers are commonly seen,
especially around the ports. Pickup trucks and vans are used for logistics and
goods transport within the city. Due to its tourism industry, Jeddah has a high
number of buses for both local transportation and tours. These regions have a
significant agricultural industry, and as such, there's a higher prevalence of
pickup trucks and small trucks used for transporting agricultural products.
Recent Developments
- Iveco
introduces new electric versions under the Daily CNH Industrial brand. In the
middle east, Iveco debuted an electric version of its New Daily light
commercial vehicle (LCV) at the 19th Ecomondo, a trade expo dedicated to the
green economy.
- In
comparison to the previous Daily Electric, the Iveco New Daily Electric (NDE)
delivers a number of noticeable advancements, including up to 20% longer
battery life and decreased energy consumption thanks to high-efficiency,
lightweight electric auxiliaries.
- Hydrogen
fuel cell-powered trucks appear to be a major topic of focus for Saudi Arabia.
Earlier this year, Hyson Motors signed an MoU to produce fuel cell trucks in
the country. In the area, Hyson Motors plans to build a manufacturing facility.
Key Market Players
- Higer Bus Company Ltd.
- Anhui Ankai
Automotive Co, Ltd.
- Yuchai
International Ltd.
- Daimler AG
- AB Volvo
- Tesla
|
By Vehicle Type
|
By Propulsion Type
|
By Battery Capacity
|
By Region
|
|
|
- Battery Electric Vehicle (BEV)
- Plug-In Hybrid Vehicle (PHEV)
- Fuel Cell Electric Vehicle (FCEV)
|
- Less Than 50 Kwh
- 50 to 250 kwh
- Above 250 kwh
|
- Northern & Central
- Eastern
- Western
- Southern
|
Report
Scope:
In
this report, the Saudi Arabia Electric Commercial Vehicle Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- Saudi Arabia Electric Commercial
Vehicle Market, By
Vehicle Type:
o Truck
o Bus
- Saudi Arabia Electric Commercial
Vehicle Market, By
Propulsion Type:
o Battery Electric Vehicle (BEV)
o Plug-In Hybrid Vehicle (PHEV)
o Fuel Cell Electric Vehicle (FCEV)
- Saudi Arabia Electric Commercial
Vehicle Market, By
Battery Capacity:
o Less Than 50 Kwh
o 50 to 250 kwh
o Above 250 kwh
- Saudi Arabia Electric Commercial
Vehicle Market, By Region:
o Northern & Central
o Eastern
o Western
o Southern
Competitive
Landscape
Company
Profiles: Detailed
analysis of the major companies presents in the Saudi Arabia Electric
Commercial Vehicle Market.
Available
Customizations:
Saudi
Arabia Electric Commercial Vehicle Market report with the given market
data, Tech Sci Research offers customizations according to a company's specific
needs. The following customization options are available for the report:
Company
Information
- Detailed analysis and profiling of
additional market players (up to five).
India
Saudi Arabia Electric Commercial Vehicle Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]