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Home Automotive, Transportation and Warehousing Automotive and Automotive Components The KSA Last Mile LEVs Market is expected to grow with the...

The KSA Last Mile LEVs Market is expected to grow with the increase in the deployment of EVs in the kingdom. Explore the key trends in the market: Ken Research

EVs are slowly gaining traction, with less than 0.5% of vehicles in Saudi Arabia being PHEVs. Efforts to develop an EV market are in line with Saudi Crown Prince Muhammed bin Salman’s Vision 2030 plan, which aims to reduce the country’s reliance on oil, diversify the economy, and implement a variety of social reforms. Saudi Arabia’s EV infrastructure is still lagging behind, as the government has yet to install charging stations in public places. Furthermore, fleet operators need to create and manage vehicle service infrastructure and charging infrastructure on their own due to the limited availability of existing set-ups in the public domain.

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1. With presence of ~10+ Charging Stations in Major Cities, the EV sector is slowly making efforts to grow in KSA.

KSA Last mile Delivery LEV MarketEfforts to create a market for EVs are consistent with the Saudi Crown Prince Muhammed bin Salman’s Vision 2030 plan, which aims to reduce the country’s dependence on oil, diversify the economy, and implement a range of social reforms. In 2018, the state-run Saudi Electric Co signed an agreement with Japanese auto giant Nissan Motor, electricity equipment firm Takaoka Toko, and Japanese utility giant Tokyo Electric Power Co to install fast-charging stations for EVs in the kingdom. Moreover, Saudi authorities began allowing their citizens to import EVs for personal use since 2018. However, it has not yet established an incentive system similar to the one in the UAE, such as free charging stations, discounted car registrations, toll exemptions, and other perks. But still with presence of ~10+ Charging Stations in major cities, the EV sector is slowly making efforts to grow in KSA.

2. Approximately 30,000 Light Commercial Vehicles are employed throughout the kingdom for last mile delivery.  

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Most of the CEP companies such as UPS, DHL and Saudi Post use four-wheelers, particularly small vans, to deliver parcels/packages. The fleets are usually contracted on a 5-year term basis and the contracting company takes care of the maintenance charges. However, the companies in the online grocery and food delivery segment do not own any fleet for deliveries. Four-wheelers such as Sedans and Mini Vans are a preferable option in Saudi Arabia for last mile deliveries rather than two- wheelers due to the unsuitable weather conditions and infrastructure of the country. Only the Grocery & Food deliveries use two wheelers for shorter distances.

3. Covid-19 and all the resultant market conditions have proved a catalyst for the GCC’s e-commerce market.   

KSA Last mile Delivery LEV MarketCOVID -19 Pandemic has led to greater growth in the e-commerce market. There is a clear drive towards overcoming logistics issues, including lack of detailed addresses for last mile delivery, and the timeliness of delivery, which are often mentioned as impediments for ecommerce in KSA. Logistics providers have been actively seeking improvements in service delivery in the ecommerce supply chain. The number of ecommerce-enabled websites has more than tripled since 2015, while visitors to the top five sites alone have seen a 50% jump to reach 21 million monthly users. The average annual spends on e-commerce in Saudi Arabia and UAE, rose by 30% in just one year between 2018 and 2019. This had led to the growth in the logistics services in the country and growth in the last mile delivery.

4. EV company valuations are soaring as investors hunt for the next Tesla.   

Saudi Arabia is keen to develop its auto industry as part of efforts to diversify the economy beyond oil and has teamed up with Japan’s Toyota Motor Corp. Under the agreement, fast-charger stations will be developed to charge EVs in 30 minutes. SEC will borrow three EVs from Nissan while TEPCO and Takaoka Toko will provide three fast chargers. Additionally, in September 2018, Saudi Arabia’s PublicAu Investment Fund (PIF) concluded an investment agreement of over $1bn in US electric vehicle (EV) manufacturer Lucid Motors, through a special-purpose vehicle wholly owned by the PIF. Also, Amazon.com led a $700 million equity investment in Rivian Automotive, the electric pickup and SUV maker preparing to deliver its first vehicles. Furthermore, state oil giant Saudi Aramco is also working on technologies to make vehicles more efficient. All these investment in the EV sector makes the LEV market more lucrative for the future.

For more insights on the market intelligence, refer to the link below:-

KSA Last Mile LEVs Market

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