Saudi Arabia powers sustainability race as EV sales in ME surge 40%

Electric vehicle adoption in the Middle East surged in 2025 as sales reached roughly 75,000 units, a 40 percent year‑on‑year increase, the International Energy Agency reported, with Saudi Arabia and Qatar together accounting for about 45 percent of regional demand. The UAE remained the largest single market in 2025 — representing almost half of sales — but its share has fallen from more than 60 percent in 2023 as neighbouring markets gain momentum. The shift comes as Saudi Arabia pushes EVs under Vision 2030, which targets net‑zero emissions by 2060 and aims for 30 percent of all vehicles in Riyadh to be electric by 2030 as part of a plan to cut emissions in the capital by 50 percent.

“This structural shift is propelled by Saudi Arabia’s aggressive Vision 2030 local manufacturing investments, such as the Lucid and Ceer facilities in King Abdullah Economic City, alongside Qatar’s rapid electrification of its public transport infrastructure,” said Joseph Salem, partner and head of travel, transportation and hospitality practice at Arthur D. Little Middle East.

Salem highlighted the scale of planned local production: “Lucid Motors is significantly expanding its AMP‑2 facility in KAEC to a targeted installed annual capacity of 150,000 fully assembled units. Simultaneously, the homegrown EV brand Ceer, a joint venture between the Public Investment Fund and Foxconn, is constructing a 1 million sq. meter facility designed to produce up to 240,000 vehicles annually by its targeted launch in late 2026.”

The IEA report and industry experts point to a combination of falling global battery costs and a rapid influx of competitively priced Chinese models reshaping the market. When regional electric car sales began to scale in 2020, Tesla accounted for about half of all sales; its share has since dropped to roughly 15 percent. BYD, which entered the regional market in 2022, has expanded to capture around 60 percent of regional EV sales.

Local executives and analysts say the transition remains uneven. “The region’s young population is also more willing to adopt and experiment with new technologies,” said Hashim Al‑Fatayerji, CEO of Cararak, adding that growth is being driven by Vision 2030, infrastructure investments, EV manufacturing projects and increasing fleet electrification. Safak Yucel, associate director of Georgetown McDonough’s Business of Sustainability Initiative, noted a market split in vehicle positioning: “What makes the adoption in Saudi Arabia and Qatar exciting is that they cater more toward a mass‑market approach. Although still small, this market expansion can be relevant for further adoption in the region.”

Charging infrastructure is expanding to support the ramp-up. ADNOC Distribution increased its fast and super‑fast charging network in the UAE by 1.4x year‑on‑year to reach 400 points by early 2026, while the Saudi Eviq joint venture is targeting the installation of 5,000 fast chargers by 2030 to enable inter‑city mobility. Salem cautioned that broader consumer uptake will depend on addressing issues such as charging density, extreme heat performance and long‑term resale values.

Outlook

• Manufacturing scale — led by Lucid and Ceer facilities — aims to supply domestic and regional fleets, with Lucid targeting 150,000 units annually and Ceer up to 240,000 units by late 2026.
• Market composition has shifted from premium dominance in the UAE toward a mass‑market push in Saudi Arabia and Qatar, largely driven by Chinese OEMs like BYD.
• Infrastructure build‑out from national oil companies and joint ventures, plus fleet electrification, will determine whether the current surge matures into sustained adoption across the Gulf.