The Saudi Arabia Electric Vehicle Components Market is projected to expand at a CAGR of 20.14%, rising to USD 0.053 billion in 2030 from USD 0.021 billion in 2025.
Saudi Arabia's Electric Vehicle (EV) Components Market is undergoing a rapid, state-led transformation, moving from a negligible import-only sector to one targeted for foundational domestic manufacturing. This strategic pivot is a direct consequence of the Kingdom’s Vision 2030 economic diversification and the Saudi Green Initiative, which seeks to position the country as a regional automotive manufacturing hub and ensure 30% of new car sales in Riyadh are electric by 2030. The market's growth is fundamentally driven by policy mandates and massive state-backed capital expenditure rather than organic consumer adoption, thereby creating an artificial, yet highly stable, demand signal for all core electric vehicle components. The focus is initially on assembly and subsequently on the complete build unit production, which compels international and domestic partners to establish local supply chains for high-value components.
The key driver is the strategic investment in domestic EV manufacturing, which creates an urgent need for localized sourcing. The establishment of Lucid's AMP-2 facility in King Abdullah Economic City (KAEC), which began semi-knocked-down (SKD) assembly in September 2023 with plans to transition to complete build unit (CBU) production of up to 155,000 vehicles annually, necessitates the immediate establishment of a local component supplier base. This transition directly increases the demand for all major vehicle components, from the Body & Chassis for local stamping to the high-tech Battery Pack and Electric Motor assemblies, as CBU production requires a deeper supply chain presence than SKD. Furthermore, the launch of Ceer, a joint venture between PIF and Foxconn, with an anticipated production capacity of up to 240,000 vehicles per year, imposes a significant, projected demand shock on the in-kingdom supply of components, especially after Ceer finalized a contract with Hyundai Transys for its "three-in-one" integrated drive system.
The primary challenge constraining market growth is the nascent state of the skilled industrial workforce and the current non-existence of a scaled, specialized domestic supplier base for components. The market must overcome this initial bottleneck: local manufacturing targets, particularly Ceer's 45% localization goal, create a colossal demand for domestic component supply, but the capacity to meet it does not yet fully exist. This constraint, however, forms the core opportunity for foreign direct investment. The imperative is to attract tier-one and tier-two suppliers who can establish local manufacturing for technically complex components such as Inverters and Power Electronics. These investments are supported by PIF's launch of TASARU Mobility Investments, an entity specifically created to develop local supply chain capabilities, transforming the challenge of localization into a funded investment opportunity.
The EV components market, being a physical product market, is highly sensitive to raw material pricing, particularly for lithium, cobalt, and nickel, which form the core of the high-value Battery Pack component. Since Saudi Arabia is not a primary producer of these key battery materials, component manufacturers face global commodity price volatility. This external price risk increases the final cost of local component assembly. However, the government's ability to offer competitively priced commodities and energy for industrial operations, as noted in Lucid's selection of KAEC, partially mitigates the overall cost of local component manufacturing, thereby supporting the economics for local production of components like the Thermal Management System and Body & Chassis.
The Saudi EV component supply chain is structurally dependent on Asian and North American production hubs, specifically for critical, high-value components. Lucid's initial assembly model relies on "kits" pre-manufactured at its US facility, highlighting a reliance on the existing global logistical network for items like the Electric Motor and complex control units. The strategic location of the manufacturing hubs in KAEC, which is near King Abdullah Port on the Red Sea, is a logistical dependency offset. This location is designed to streamline imports from global hubs while also facilitating the eventual export of finished vehicles, thereby reducing logistical costs and optimizing the supply chain for components that must be imported. The long-term strategy pivots on using PIF's investment in TASARU to systematically localize segments of this chain, targeting both simple and complex components to reduce dependence on global logistics for long-term production runs.
The Saudi government's regulatory framework strongly favours localization and infrastructure development, which directly impacts the demand for components.
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Jurisdiction |
Key Regulation / Agency |
Market Impact Analysis |
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Saudi Arabia |
Vision 2030, Saudi Green Initiative |
Sets the 30% EV sales target for Riyadh by 2030, creating a non-discretionary, long-term vehicle demand signal that mandates the scaling of local component production. |
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Saudi Arabia |
Electric Vehicle Infrastructure Company (EVIQ) |
Mandates the deployment of 5,000+ fast chargers by 2030, substantially increasing demand for certified high-capacity power electronics, converters (DC-DC), and advanced wiring harnesses. |
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Saudi Arabia |
Saudi Standards, Metrology and Quality Organization (SASO) |
Establishes technical standards for EVs and charging equipment, compelling component manufacturers (e.g., for On-Board Chargers) to ensure compliance, effectively dictating technical specifications for demand. |
The BEV segment constitutes the primary growth driver for the components market due to governmental strategy and OEM commitments. Vehicles manufactured by Lucid and Ceer are fundamentally Battery Electric Vehicles. The sheer scale of planned production—up to 155,000 units annually from Lucid's AMP-2 and 240,000 from Ceer's facility—directly compels massive, consistent demand for high-voltage, high-energy-density Battery Packs. Unlike Hybrid Electric Vehicles (HEVs) which require smaller battery packs and supplementary internal combustion engines, BEVs rely exclusively on the battery and the complete electric powertrain. This creates specialized demand for large-format lithium-ion cells, integrated Thermal Management Systems to ensure optimal performance in the Gulf's high-temperature environment, and high-power Inverters capable of managing hundreds of kilowatts of electrical flow. The government’s commitment to purchase up to 100,000 Lucid BEVs further de-risks this segment, solidifying BEV-specific components as the dominant demand stream.
The OEM segment is the current and primary source of demand for EV components, overshadowing the Aftermarket. This is a direct result of the government’s industrial policy, which prioritizes establishing local vehicle production capabilities. OEMs like Lucid and the forthcoming Ceer are the sole entities capable of absorbing the mass-production capacity of a tiered supplier base. The component necessity is driven by the production ramp-up schedule of the vehicle manufacturers, initially requiring semi-knocked-down (SKD) component kits and rapidly transitioning to complete knock-down (CKD) and localized supply. This requirement is high-volume, highly technical, and governed by stringent long-term supply contracts for components such as Electric Motors, Power Electronics, and custom-designed Body & Chassis modules. The government's investment and purchase mandates ensure the financial viability of these local OEMs, thereby guaranteeing the foundational demand for components for the next decade.
The competitive landscape in the Saudi EV components market is defined by strategic partnerships and vertical integration rather than traditional free-market competition. The environment is heavily influenced by the two PIF-backed vehicle manufacturers, Lucid and Ceer, whose localization requirements shape supplier competition.
Lucid's strategy is centered on technological vertical integration, which directly impacts component requirements by prioritizing in-house design. The company opened its AMP-2 facility in KAEC in September 2023. The strategic positioning is to manufacture luxury electric vehicles, such as the Lucid Air, and its forthcoming Gravity SUV. This focus mandates demand for extremely high-specification components, particularly its proprietary Electric Motor and advanced Battery Pack technology. The initial SKD assembly model temporarily limits demand for deep local component production but creates a guaranteed market for high-value sub-components as the plant ramps up to its 155,000-unit annual CBU capacity.
Ceer, established as a joint venture between PIF and Foxconn, is positioned as Saudi Arabia’s first EV brand and OEM. Its strategic positioning is to develop and manufacture sedans and SUVs tailored for the local and regional markets. The company's localization strategy is explicit, targeting a 45% local content rate. This strategy directly drives competitive demand among potential Tier 1 and Tier 2 suppliers for components across the board. Ceer's commitment of SAR 5.5 billion in local supply agreements, including the contract with Hyundai Transys for integrated drive systems, demonstrates a distinct policy-backed demand for high-value powertrain components manufactured in the kingdom.
Ceer National Automotive Company announced the signing of SAR 5.5 billion (approximately $1.5 billion) in agreements for the supply of vehicle components and charging equipment, with over 80% of the contracts awarded to Saudi-based companies. This action marks a verifiable milestone in the localization target, translating the policy goal into a definitive, quantified demand for locally-produced EV components.
The Public Investment Fund (PIF) announced the launch of TASARU Mobility Investments, an investment company dedicated to developing local supply chain capabilities for the automotive and mobility ecosystem. The creation of this entity signals a concrete funding mechanism to support component manufacturers, thereby reducing the investment risk for foreign suppliers looking to establish local capacity for everything from Power Electronics to Thermal Management Systems.
Lucid Group officially opened its Advanced Manufacturing Plant 2 (AMP-2) in King Abdullah Economic City (KAEC), Saudi Arabia. The facility began with semi-knocked-down (SKD) assembly of the Lucid Air vehicle kits, creating an immediate, though limited, demand for local logistics, warehousing, and finishing components, while setting the stage for the transition to complete build-to-unit (CBU) production of up to 155,000 vehicles per year. This capacity addition is the single largest factor creating future component demand.
| Report Metric | Details |
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| Total Market Size in 2026 | USD 0.021 billion |
| Total Market Size in 2031 | USD 0.053 billion |
| Growth Rate | 20.14% |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | Component, Vehicle Type, Technology, End User |
| Companies |
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