BYD, which initiated its operations in Saudi Arabia last year and currently operates three showrooms, has outlined an aggressive expansion plan to establish seven additional locations by the second half of 2026. This strategic move underscores the company's commitment to a market that, while nascent for EVs, holds significant long-term potential. Jerome Saigot, BYD's managing director for Saudi Arabia, emphasized the need for rapid and substantial growth, stating, "Saudi is a complex market. You need to go fast. You need to think big. We are not here to stay at five or ten thousand cars a year."
The automaker projects sales of over 5,000 vehicles in the kingdom this year. While a modest figure in the grand scheme of BYD's global sales, it represents a considerable volume in a market where EV adoption has been slow and conventional vehicles still reign supreme.
Saudi Arabia's Vision for an EV Future
Saudi Arabia is actively investing in the electric vehicle industry through its sovereign wealth fund, the Public Investment Fund (PIF). This initiative is a core component of the kingdom's broader economic diversification strategy, aiming to reduce carbon emissions, decrease reliance on auto imports, and foster local industrial growth. The PIF has already made significant strides, including backing Lucid Motors and supporting the construction of Saudi Arabia's first automotive manufacturing plant. Furthermore, the fund has launched its own EV brand, Ceer, and established a joint venture to develop a comprehensive EV charging infrastructure across the nation.
Navigating Challenges and Embracing Competition
Despite the concerted efforts, the adoption of electric cars in Saudi Arabia faces several hurdles. Currently, EVs account for just over 1% of total car sales in the kingdom. Factors such as high purchase costs, a still-developing charging network, and the challenging extreme temperatures in the region contribute to the slower-than-anticipated transition, according to PwC.
The recent opening of Tesla's first showroom in Riyadh in April marks a significant development in the Saudi EV landscape. Tesla joins other automakers, including BYD and Geely, in vying for market share. However, BYD's Saigot views Tesla's entry not as a threat, but as a catalyst for growth. "The more Tesla communicates on marketing, the better it is for us," he noted, recognizing that increased awareness and education about EVs ultimately benefit all players in the market.
This dynamic competition comes as BYD has been making notable gains globally, even surpassing Tesla in fully electric car sales in Europe for the first time in April. Some analysts now anticipate BYD could outsell Tesla globally for the entire year. As Saudi Arabia continues its journey towards an electrified future, the strategic maneuvers of global automotive giants like BYD will be crucial in shaping the kingdom's nascent EV market.