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Senior Market Research Analyst, Al-Monitor
Jan. 13, 2023
2023 is expected to be a big year for the production of electric vehicles, or EVs. A wave of new electrified models are rolling out globally, delivered by storied automakers and startups alike, which comes as consumers and governments continue embracing the transition away from gas-powered vehicles. Industry activity is ramping up in MENA too, evidenced by Saudi Arabia recently launching Ceer, a new EV brand backed by the kingdom’s powerful wealth fund. Simultaneously, MENA produced a range of new EV ventures and developments in 2022, notably in the UAE and Turkey. With the UAE hosting COP28 in December, that trend could accelerate in 2023 and see regional players separate themselves from the pack.
Scenario 1: The UAE delivers significant EV-related moves around COP28
In the climate summit’s spotlight, the UAE produces new EV investments in 2023, ranging from boosting existing ventures to launching new companies, partnerships and funds linked to the industry.
That said, although the UAE will push green initiatives around COP28, it hasn’t yet matched Saudi Arabia’s state-led strategic effort to develop the EV industry.
Scenario 2: Saudi Arabia bets even bigger on EVs
After launching Ceer and securing Lucid’s factory, Saudi Arabia scores new investments from other EV players in 2023 and the PIF stays active developing the sector. This establishes the kingdom as a rising regional EV manufacturing hub with global reach.
However, Saudi Arabia’s EV manufacturing ambitions will likely face speed bumps. Other industry upstarts like Tesla and Lucid have faced production issues and missed targets. Developing Ceer from scratch into a leading regional EV maker won’t be easy as competition accelerates worldwide.
Scenario 3: Middle East investors target global EV opportunities in 2023
Amid global economic turmoil and depressed tech valuations, Middle East wealth funds flush with cash are well-positioned to pursue EV-related moves. 2023 could produce attractive investment opportunities, ranging from battery makers to charging solutions.
Still, investors globally are now more attuned to EV opportunities. Although share prices of key publicly traded firms like Tesla and Lucid cratered in 2022, it was a big year for private equity investments into the EV ecosystem, reported SP Global, which points to potential dealmaking competition ahead.
Ultimately, the Middle East’s new EV brands won’t radically reshape local transportation in 2023, but this still offers a compelling moment for regional countries to seize EV opportunities as production ramps up worldwide. The real question is whether countries will see EV ambitions transition from aspirational to impactful. Turkey is the exception, thanks to an already robust automotive sector currently exporting EVs. Ahead of COP28, the UAE is a key player to watch — for the EV moves it makes or doesn’t. Saudi Arabia will likely continue engaging with global companies on EV-related moves in 2023, but the real test will be Ceer and Lucid avoiding delays scaling up local manufacturing. Either way, it appears a region known for fossil fuels can play a unique role in the global race to adopt EVs, with 2023 another busy year.
Samuel Wendel is a senior market research analyst with Al-Monitor covering economic, tech and business trends across the Middle East. He has previously served as a journalist with Forbes Middle East and Wamda, where he reported on key industry developments spanning a range of sectors in the region.
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