Saudi Arabia

Saudi Arabia is putting itself on the path to adopting electric vehicles (EVs). The current Saudi framework for EVs is in its early stages and is yet to be developed into a comprehensive framework. Recent EV initiatives in Saudi Arabia are in line with the general objective of Saudi Vision 2030, which aims to diversify the Saudi economy away from oil.

The transportation sector in Saudi Arabia consumes almost a quarter of its total energy consumption. Energy consumption is expected to grow, especially after the country’s recent decision to allow women to drive, which will take effect in June 2018.

In aiming to reduce its oil dependency, Saudi Arabia is looking to EV deployment in the kingdom as an initiative to increase energy efficiency in its transportation sector.

1. What EVs have been deployed in your jurisdiction to date?

EVs are not deployed in Saudi Arabia on a commercial scale. In 2017 the Saudi Standards, Metrology and Quality Organization (SASO) prohibited the import of EVs pending the issuance of SASO’s Technical Regulations for Electric Vehicles (“the SASO Regulations”).

Following the publication of SASO Regulations on 5 January 2018, SASO has allowed a very limited number of EVs, imported by end-users, to enter to Saudi Arabia for personal use only (i.e. not commercial).

The deployment of EVs on a commercial scale is still pending the entry into force of the SASO Regulations (see below).

2. Is there any specific legislation for/regulation of EVS in your jurisdiction?

The SASO Regulations are, to date, the only EV specific regulations in Saudi Arabia. The regulations are due to come into force six months after publication – i.e. six months from 5 January 2018. The SASO Regulations were heavily influenced by other countries’ EV frameworks, especially the UAE regulations for the sale and use of EVs.

The SASO Regulations identify the requirements to be satisfied by EVs deployed in Saudi Arabia, regardless of whether the EVs were manufactured in Saudi Arabia or imported from aboard. The scope of the regulations covers only EVs whose overall weight does not exceed 3,500kg and whose speed exceeds 25km/h.

It is envisaged that SASO will also issue complementary regulations to further regulate EV deployment in Saudi Arabia.

3. What measures promote EVS in your jurisdiction?

Saudi Arabia has not yet set out incentives for the deployment of EVs, such as free charging stations, greenbank loans, etc. EV incentives are yet to be developed, especially when EV deployment starts on a commercial scale.

Other initiatives taken by Saudi Arabia may contribute to the promotion of EVs. For example, the Saudi Electricity Company has signed a deal with Nissan Motor, Takaoka Tokyo and Tokyo Electric Power Company for the first EV pilot project in Saudi Arabia. Reportedly, the agreement provides for the development of fast-charger EV stations. It is yet to be seen how this project would contribute to the overall deployment of EVs.

Most recently, Saudi Arabia has signed a memorandum of understanding (“MoU”) with the UK in a move to reduce carbon emissions and support Saudi Vison 2030. The MoU commits both countries to cooperate and share expertise to develop technologies including smart grids and EVs.

4. Who are the main entities (e.g. developers, government, System Operator) and what are their roles in the deployment of EVS in your jurisdiction?

SASO plays the major role in EV deployment in Saudi Arabia. As well as setting out requirements under SASO Regulations, SASO has wide authority to regulate EVs in the kingdom. Its powers mainly cover ensuring compliance with SASO regulations, monitoring compliance along the life of the EV, and granting conformity certificates required for EV deployment in Saudi Arabia.

Other entities that may contribute to EV deployment in Saudi Arabia on policy, commercial, financial and infrastructure levels include:

  • The Saudi Energy Efficiency Center
  • Saudi Electricity Company
  • The Ministry of Trade and Investment
  • Saudi Customs

5. What are the main challenges to further deployment of EVs in your jurisdiction? How have EV developers sought to overcome these challenges to date?

Although Saudi Arabia has started to take some steps towards deploying EVs, it is yet to be seen how the challenges inherent to EVs deployment will be mitigated.

One of the main challenges is the low fuel price in Saudi Arabia. Although fuel prices have been increasing recently, Saudi Arabia still subsidises fuel prices which remain generally low. Given the low fuel prices, it would be necessary to implement incentives for the deployment of EVs in Saudi Arabia in order to allow EVs to achieve a certain level of competitiveness vis-à-vis fuel-powered conventional vehicles.

The absence of the infrastructure required by EVs is an added challenge to their deployment.

Authors

Hassan Khalife
Hassan Khalife
Afaq Sindhu
Afaq Sindhu