SINGAPORE: World trade issues dominated the opening day of the Bloomberg New Economy Forum (NEF) in Singapore, with some speakers at the event expressing optimism that rising tensions between the US and China might not prove a stumbling block to global growth.
Wang Qishan, vice president of China, defused worries with an apparent olive branch offered to US President Donald Trump. “Both sides will gain from co-operation and will lose from confrontation,” he said in the keynote address.
“On trade, China will stay calm and will be open to negotiation. China is ready to have discussions with the USA on areas of mutual concern, and reach a solution satisfactory to both sides,” he added.
In the opening speech, Michael Bloomberg, founder of the global media group that has organized the NEF, quoted Henry Kissinger, former US secretary of state who was also at the event; “Talk is good. If you’re talking, you’re not fighting.”
The Chinese politician underlined, however, that his country was “firmly against unilateralism and trade protectionism” — terns that have become a coded reference to the tariffs erected by Trump on Chinese imports. He also condemned the “cold war mentality and power politics,” in another veiled reference to the US.
“Such rapid changes have split some countries and societies. The polarization of right-leaning populism has manifested itself in political demands, which has led to unilateral policies against globalization and seriously affected the international political ecosystem,” Qishan added.
Peter Mandeslon, a former British trade minister, said that the World Trade Organization — the global regulatory body under attack by Trump — was “at a crossroads” but that it was not necessarily doomed. “There is a risk of collapse but we are not quite at that point yet,” he said.
He said that the reasons the WTO was in trouble was as much for political as of economic reasons. “People are turning against trade because they feel they are not getting their fair share of the pie. The politics has got to work better if we’re going to restore confidence in trade,” he said.
Mandelson said that China was a “huge issue” for world trade.
DBS Group, the Singaporean bank that is one of the biggest trade finance facilitators in Asia, downplayed the effects so far of US-China confrontation on trade.
Piyush Gupta, the DBS chief executive, said: “The direct effect will not be very material. It is very hard to shift supply chains,” adding that fears of a trade war between the two biggest economies in the world had been “somewhat overblown.”
A session on the Chinese “belt and road” initiative also heard fears about the spreading influence of China in its dealings with central Asia, the Middle East and Africa via the huge infrastructure investment program it has launched.
Some countries — including Malaysia, Sri Lanka and Pakistan — have expressed fears over the leverage China had on their economies as a result of the initiative.
Robert Blackwell, former US ambassador to India, said China should work more closely with partner governments to alleviate the concerns and employ more local labor. “But will they do that? I doubt it,” he added.
China-US trade tension dominates opening day of Bloomberg New Economy Forum
China-US trade tension dominates opening day of Bloomberg New Economy Forum
- China vice president firmly against 'unilateralism'
- Mandelson says WTO at a 'crossroads'
Global trade hits record $33tr in 2024, growing by 3.7%: UNCTAD
RIYADH: Global trade reached a record high of $33 trillion in 2024, marking a 3.7 percent increase from the previous year, driven by an uptick in the services sector.
According to the latest Global Trade Update from the UN Conference on Trade and Development, services drove growth, rising 9 percent for the year and adding $700 billion — nearly 60 percent of total exchange expansion.
Meanwhile, trade in goods grew 2 percent, contributing $500 billion.
“This positive momentum is expected to continue into Q1 (first quarter) 2025, building on a global trade value of nearly $33 trillion in 2024,” the report said.
UNCTAD’s analysis highlighted a continued shift in global trade dynamics, with developing countries — particularly China and India — outperforming their developed counterparts.
While many advanced economies faced exchange contractions, emerging markets sustained momentum, bolstered by strong exports and domestic demand.
China’s trade surplus expanded significantly in 2024, fueled by robust exports. Meanwhile, the US trade deficit widened, reflecting its growing reliance on imports. South-South trade, involving exchanges between developing economies, remained a key driver of global trade growth.
Services trade booms
Services trade outpaced goods trade in 2024, increasing by 9 percent and contributing approximately $700 billion to global exchange expansion. This sector’s resilience contrasts with goods trade, which rose by just 2 percent, adding around $500 billion. The fourth quarter saw services trade maintain strong momentum, while goods trade growth decelerated.
Tariffs and trade barriers
Despite overall growth, UNCTAD warns of significant trade barriers. High tariffs continue to hinder market access for developing countries, particularly in agriculture and manufacturing.
“High import tariffs raise costs for businesses and consumers, potentially curbing growth and competitiveness,” the report said.
It added that tariff escalation — where higher duties are imposed on processed goods than raw materials — remains a major obstacle to industrialization in developing economies.
Agricultural exports from developing countries still face steep import duties, averaging nearly 20 percent under most-favored-nation treatment. Meanwhile, textile and apparel exports continue to be subjected to some of the highest tariff rates, limiting competitiveness.
Uncertainty clouds 2025
Looking ahead, UNCTAD warned that mounting geopolitical tensions, trade disputes, and protectionist policies could disrupt global exchange in 2025. The report identified several risk factors, including:
Shifts in trade policy: Increasing protectionist measures, such as new tariffs targeting specific industries, may reshape global supply chains.
Ongoing trade tensions: Major economies, including the US and China, continue to impose retaliatory tariffs, affecting global trade flows.
Subsidies and industrial policies: Governments are prioritizing national industries, particularly green energy and critical minerals, which could impact international trade relations.
Economic slowdown risks: Indicators such as declining demand for container shipping suggest potential trade contraction in the coming quarters.
However, the analysis also noted potential tailwinds, including China’s planned economic stimulus and the expected easing of global inflation, which could support trade expansion.
Sectoral trade trends
Trade growth varied significantly across sectors in 2024. Office equipment and pharmaceuticals saw above-average growth, while the energy sector faced a sharp decline. In the third quarter, agri-food, communication equipment, and transport surged, whereas apparel and extractive industries weakened.
Global trade imbalances
The report highlighted growing trade imbalances, with the US maintaining the world’s largest trade deficit and China recording the highest surplus. The EU, which ran a deficit in previous years, returned to surplus in 2024, aided by shifts in energy trade.
Bilateral trade imbalances, particularly between the US and China, remain significant, contributing to global economic uncertainty.
As global trade enters 2025, policymakers face the challenge of balancing growth with rising protectionism. UNCTAD emphasized the importance of multilateral cooperation and strategic trade policies to sustain momentum and navigate emerging risks.
US weighing in on Lebanon’s next central bank chief, sources say
- US aims to curb Hezbollah’s influence in Lebanon’s banking
- Candidates include Camille Abousleiman, Firas Abi-Nassif, Philippe Jabre
BEIRUT/WASHINGTON: The US is weighing in with Lebanon’s government on the selection of the country’s next central bank governor in a bid to curtail corruption and illicit financing for armed group Hezbollah through Lebanon’s banking system, five sources familiar with the issue said.
Washington’s feedback on the candidates for the top role in shaping Lebanon’s monetary policy is the latest example of the US’ unusually hands-on approach to the Middle Eastern country, where a more than five-year financial crisis has collapsed the economy.
It also demonstrates the US’ continued focus on weakening Hezbollah, the Iran-backed group whose sway over the Lebanese government has been reduced after the group was pummelled by Israel in last year’s war.
Since then, Lebanon has elected US-backed Joseph Aoun as president, and a new cabinet without a direct role for Hezbollah has taken power. That government must now fill vacant posts — including at the central bank, run by an interim governor since July 2023.
The US is reviewing the profiles of a handful of candidates for the role, according to three Lebanese sources briefed on the issue, one Western diplomat and an official from US President Donald Trump’s administration.
The sources spoke to Reuters on condition of anonymity to discuss Washington’s role in the selection process, the details of which have not been previously reported.
US officials met with some potential candidates in Washington and at the US embassy in Lebanon, two of the Lebanese sources and the Trump administration official said.
The Lebanese sources, who were briefed on the meetings, said the US officials asked candidates questions, including how they would fight “terrorist financing” through Lebanon’s banking system and if they were willing to confront Hezbollah.
The State Department, White House and the offices of Lebanon’s president and prime minister did not immediately respond to requests for comment.
The Trump administration official said the meetings were part of “normal diplomacy” — but said the US was making its guidance on candidates’ qualifications clear to the Lebanese government.
“The guidelines are, no Hezbollah and nobody who has been caught up in corruption. This is essential from an economic perspective,” the official told Reuters.
“You need somebody who is going to implement reform, demand reform, and refuse to look the other way whenever people try to do business as usual in Lebanon,” the official said.
MAJOR ROLE IN REFORM
The Lebanese sources said the candidates being seriously considered included former minister Camille Abousleiman, Firas Abi-Nassif, head of an investment firm, and Philippe Jabre and Karim Souaid, both heads of their own asset management firms.
The next governor will play a major part in any economic and financial reforms, which Aoun and Prime Minister Nawaf Salam have pledged to prioritize to help Lebanon emerge from a devastating financial meltdown that began in 2019.
Triggered by widespread corruption and profligate spending by the governing political elite, the economic crisis impoverished most Lebanese, demolished the Lebanese pound and brought the banking system to a standstill. Lebanon’s new government is looking to resume talks with the International Monetary Fund for a financing program, but the reforms remain a prerequisite. Western and Arab countries have also set reforms as a condition to provide any reconstruction support to Lebanon, large swathes of which were left in ruins by Israel’s military campaign last year.
In that vein, US officials were discussing the candidates for central bank governor with Saudi Arabia, according to the Western diplomat and the Trump administration official.
The Saudi government’s media office did not immediately respond to a request for comment.
The incoming governor would replace interim chief Wassim Mansouri, who has been overseeing the bank since the 30-year tenure of longtime head Riad Salameh ended in disgrace in 2023.
Through most of his time as central bank chief, Salameh was feted as a financial wizard and enjoyed the backing of the US, which has a keen interest in the position because it oversees Lebanon’s broader banking system and helps keep it compliant with US laws preventing the financing of groups designated as “terrorist” factions, including Hezbollah.
But Lebanon’s financial collapse tainted Salameh’s legacy. A month after he left office in 2023, Salameh was sanctioned by the United States, Britain and Canada, which accused him of corrupt actions to enrich himself and his associates, and is facing charges of financial crimes in Lebanon and broad. Last year, Lebanon was placed on a financial watchdog’s “grey list” after failing to address concerns about terrorism financing and money laundering through its financial system.
Pakistan keeps fuel prices unchanged, plans power tariff cuts for public relief
- Shehbaz Sharif says a comprehensive strategy is being finalized to reduce electricity charges
- Fuel prices and electricity tariffs are sensitive issues after high inflation rates recorded in 2023
ISLAMABAD: Prime Minister Shehbaz Sharif announced on Saturday the government will maintain current petroleum product prices for the another fortnight and utilize the resulting fiscal space to implement a reduction in electricity tariffs, aiming to provide relief to consumers.
Fuel prices in Pakistan are adjusted fortnightly, reflecting global energy market fluctuations and the rupee-dollar exchange rate, to pass on the net effect to consumers.
Since fuel is a key input for thermal power generation, keeping petroleum prices unchanged can create fiscal space for the government to lower electricity tariffs and making it more affordable for consumers.
“We have decided to maintain petroleum prices at their previous levels and transfer the entire financial advantage to the public through reduced electricity tariffs,” the prime minister said in a statement released by his office.
“This measure, among many others, will lead to a meaningful decrease in electricity rates.”
Sharif also said that a comprehensive and effective strategy was being finalized to reduce electricity charges, with details to be announced in the coming weeks.
“Since assuming office, we pledged to prioritize public relief,” he said. “This relief will not only lower electricity prices but also have an overall impact on inflation, leading to a further decline.”
Both fuel prices and electricity tariffs are sensitive issues in Pakistan, which experienced an inflation rate hitting about 38 percent in 2023.
Subsequent stringent monetary policies have significantly reduced inflation, with the latest figures indicating a drop to 1.5 percent in February, marking a nine-year low.
The rise of ‘phygital’ — Saudi e-commerce industry sees Ramadan rush
- Convergence of cultural roots with digital convenience is reshaping consumer expectations across the Kingdom
RIYADH: Embracing the essence of tradition while adapting to the evolving demands of a digital era, Ramadan in Saudi Arabia reflects a fusion of heritage and modernity.
The convergence of cultural roots with digital convenience is reshaping consumer expectations across the Kingdom, which has a population of 38 million, of whom 70 percent are under the age of 35.
Brands are now tasked with infusing core values such as personalization, community engagement, and generosity into the shopping journey to resonate with this tech-savvy and culturally rich demographic.
E-commerce rush in Saudi Arabia during holy month of Ramadan
According to Janahan Tharmaratnam, partner at Arthur D. Little Middle East, the Kingdom’s digital commerce market — valued at $14 billion in 2023 — is projected to reach $20 billion in 2025, a compound annual growth rate of 20 percent.
“The Ramadan period alone accounts for 35-40 percent higher transaction volumes, driven by a surge in demand for groceries, electronics, fashion, and gifting,” Tharmaratnam said. “The post-pandemic shift to online shopping has solidified consumer reliance on e-commerce, with 77 percent of Saudis now preferring digital-first shopping experiences.”
He went on to say that growth is not just focused on demand — it is also about fulfillment.
The Ramadan period alone accounts for 35-40 percent higher transaction volumes, driven by a surge in demand for groceries, electronics, fashion, and gifting.
Janahan Tharmaratnam, Partner at Arthur D. Little Middle East
“Logistics networks must scale by 40 percent to meet the Ramadan surge, with nighttime deliveries increasing by 50 percent compared to other months,” he explained, adding that successful businesses do not just ramp up promotions; they optimize artificial intelligence-driven demand forecasting, reduce delivery times by 30 to 40 percent, and integrate micro-fulfillment centers across urban hubs to ensure inventory is closer to consumers.
This shift from centralized warehouses to hyper-local distribution is key to sustaining Ramadan’s retail boom, according to Tharmaratnam.
“A prime example is Jahez, Saudi Arabia’s homegrown quick-commerce platform, which experienced a 70-percent surge in Ramadan orders last year. Instead of simply adding more riders, Jahez used AI-driven logistics to optimize routes, reducing delivery times by 25 percent,” he said. “The platform also expanded partnerships with neighborhood retailers, ensuring customers had access to essentials without supply-chain bottlenecks. This kind of data-driven agility will define the next phase of e-commerce in Saudi Arabia.”
Tharmaratnam said that mobile commerce dominates, accounting for over 90 percent of e-commerce transactions during Ramadan, while social commerce, via WhatsApp, Instagram, and TikTok, now drives 30 percent of online sales.
He went on to emphasize that the real disruption is the shift from transactional commerce to culturally embedded, experience-driven engagement, as traditional Ramadan shopping has focused on physical markets and communal buying.
The partner stressed that today, leading e-commerce players curate AI-driven experiences that align with consumer sentiment. From AI-powered gifting suggestions to influencer-led Ramadan livestreams, brands that focus on storytelling rather than hard-selling see higher conversion rates and customer retention beyond Ramadan.
“A great example is Namshi, a leading Saudi fashion e-commerce platform. Last year, Namshi saw a 45-percent boost in sales conversion rates by combining cultural resonance with digital engagement,” Tharmaratnam said. “The platform launched AI-powered Eid styling recommendations, influencer-led ‘Suhoor Lookbooks,’ and interactive content that blended fashion with tradition. By seamlessly integrating Ramadan traditions into the online shopping journey, Namshi transformed shopping from a necessity into a personalized, experience-driven event.”
Ramadan traditions and online shopping behaviors
There is no doubt that the fundamental values of Ramadan, such as generosity, family bonding, and the distinct pattern of late-night gatherings, have a significant impact on online shopping trends in Saudi Arabia.
According to Joe Abi Akl, partner and head of Oliver Wyman’s retail and consumer practice for India, the Middle East and Africa, there is a significant spike in demand for essential groceries, traditional fashion and thoughtful gifts, with peak activity occurring post-iftar.
Expect a significant leap in logistics efficiency, with same-day or even instant delivery becoming more prevalent.
Joe Abi, Akl Partner and head of Oliver Wyman’s retail and consumer practice
“Savvy businesses are capitalizing on this by crafting culturally resonant marketing campaigns, curating Ramadan-specific bundles, and ensuring swift, reliable delivery that accommodates the altered daily schedules. This includes leveraging suhoor and iftar time-focused promotions,” Akl said.
Ian Khan, a technology futurist and author, noted that Ramadan is not just a time of spiritual reflection, it is also a season of significant consumer activity — and retailers in Saudi Arabia are capitalizing on this in remarkable ways.
“Take Mazeed, for example — this e-commerce platform has curated products from over 8,000 local merchants, offering items that deeply resonate with Ramadan traditions.
“This isn’t just about sales; it’s about creating meaningful shopping experiences that align with cultural values,” Khan said.
Opportunities Ramadan e-commerce poses for businesses
Ramadan presents a prime opportunity for Saudi businesses to forge deeper customer connections through bespoke, culturally sensitive campaigns and exclusive loyalty programs.
Oliver Wyman’s Akl said that the heightened online traffic during this period allows for significant brand building and the refinement of operational efficiencies, particularly in fulfillment and delivery.
“This is also the perfect time to explore cutting-edge technologies like AI-powered chat commerce — which offers personalized customer service — and strategic influencer partnerships that resonate with the Saudi audience,” he added.
ADL’s Tharmaratnam suggested Ramadan is an opportunity not just to increase sales, but to build enduring digital-engagement strategies.
HIGHLIGHT
Mobile commerce accounts for over 90 percent of e-commerce transactions during Ramadan, while social commerce, via WhatsApp, Instagram, and TikTok, now drives 30 percent of online sales.
“The Kingdom’s population growth — 2.5 percent annually — and urban expansion are driving a fundamental shift in how businesses approach fulfillment, customer experience, and personalization. Instead of treating Ramadan as a short-term promotional window, brands that invest in AI-driven customer retention strategies and logistics optimization will see sustained post-Ramadan growth,” Tharmaratnam said.
“The biggest disruption comes from AI-driven conversational commerce. With WhatsApp and chatbot-based shopping now accounting for 25 percent of digital transactions, brands must rethink how they engage customers,” he added.
Moreover, supply-chain transparency is becoming a differentiator. Real-time delivery tracking and blockchain-enabled halal verification will build trust in Ramadan purchases, especially in the $6 billion halal food and fashion market, the ADL partner highlighted.
“An example of this is Cenomi, Saudi Arabia’s largest retail group, which seamlessly blends physical and digital commerce. By integrating augmented reality shopping experiences, in-store pickup for online orders, and AI-driven product recommendations, Cenomi saw a 30-percent Ramadan sales boost in 2023. This ‘phygital’ approach — combining the best of physical and digital shopping — will define the future of Ramadan commerce in the Kingdom,” Tharmaratnam said.
Khan told Arab News that shopping app installations in Saudi Arabia surged by 67 percent during Ramadan in 2024, in what is “clear indicator” of how mobile-first commerce is shaping the future.
He added: “Consumer spending follows this trend. In 2024, 64 percent of foreign nationals in Saudi Arabia reported higher expenditures during Ramadan, reinforcing the economic impact of the season. And across the Middle East and North Africa, e-commerce transactions shot up by 23 percent, with Gross Merchandise Value climbing 13 percent. This is the power of Ramadan in the digital age — blending tradition with technology to fuel unprecedented growth.”
Ramadan e-commerce projections and alignment with Vision 2030
From Oliver Wyman’s perspective, Akl explained that Ramadan e-commerce in Saudi Arabia this year will be driven by sophisticated AI personalization, ensuring shoppers receive highly relevant offers and recommendations.
“Expect a significant leap in logistics efficiency, with same-day or even instant delivery becoming more prevalent. Live shopping and social commerce will be integral, creating interactive and engaging experiences,” he said. “Furthermore, embedded finance solutions will streamline transactions, fostering frictionless purchasing.”
Akl went on to highlight that this evolution directly supports Saudi Vision 2030’s digital-transformation goals, building a robust, tech-enabled retail landscape that prioritizes convenience and expands consumer choice, directly contributing to the Kingdom’s economic diversification.
ADL’s Tharmaratnam noted that in 2025 Saudi Arabia’s e-commerce sector will be worth $20 billion, and the way consumers interact with digital platforms continues to evolve at an exponential pace.
“Ramadan commerce will shift from being reactive to predictive and personalized, driven by AI-powered shopping assistants, voice commerce, and health-integrated marketplaces. Consumers won’t just be browsing for products — they’ll be receiving real-time, AI-curated recommendations based on their dietary preferences, health conditions, and fasting habits,” he said.
Vision 2030 is pushing for a cashless economy, targeting 70 percent digital payments by 2025, as well as the expansion of smart logistics networks and the integration of digital health tools into everyday life. This means Ramadan e-commerce will no longer be just about selling — it will be about enabling better, healthier choices.
The partner explained that virtual dietitians, AI-powered hydration monitoring, and smart pharmacy solutions will be embedded directly into e-commerce experiences.
“A preview of this is already happening with SehhaTech, an AI-driven health-commerce platform in Saudi Arabia. SehhaTech integrates digital pharmacy services, health coaching, and e-commerce, allowing users to buy fasting-friendly supplements, receive medication adherence reminders, and even book telehealth consultations,” Tharmaratnam said.
“During Ramadan, these services saw a 150-percent increase in engagement, proving that consumers aren’t just looking for products — they’re looking for intelligent, personalized health solutions integrated with their shopping experiences,” he added.
Khan believes that as Saudi Arabia pushes toward Vision 2030 and a fully digital economy, the Ramadan rush will only become more sophisticated.
“AI-driven personalization, seamless fintech solutions, and hyper-efficient logistics will redefine the shopping experience. Businesses that understand this intersection of culture and technology will be the ones that thrive,” he said.
Saudi Arabia is shifting gears and racing into the EV future
- Kingdom is making a strategic play to lead the global automotive revolution under its ambitious Vision 2030
RIYADH: Long known for its oil industry, Saudi Arabia is now racing toward an electrified future, not just for sustainability reasons, but also to get ahead in this trillion-dollar market.
With billions of dollars being poured into infrastructure, cutting-edge technology and supply chain localization, the Kingdom is making a strategic play to lead the global automotive revolution under its ambitious Vision 2030 road map.
Saudi Arabia is focused on creating a comprehensive EV ecosystem, and the government is aiming for 30 percent of vehicles in Riyadh to be electrified by 2030.
This strategy has seen the Kingdom invest in US-based EV manufacturer Lucid through its Public Investment Fund, as well as creating its homegrown electric vehicle brand, Ceer — set to launch its first models in 2026.
Big bets and bold moves: Saudi Arabia’s investment in EVs
Saudi Arabia’s commitment to economic diversification is evident in its substantial investments in EV production and battery supply chains.
Heiko Seitz, PwC Global and Middle East eMobility leader, told Arab News that the Kingdom is prioritizing the development of a self-sufficient automotive supply chain as a key strategy to solidify its position in the global EV industry.
He added: “Through significant investments, such as $3.4 billion in Lucid Motors to produce 155,000 EVs annually and a $5.6 billion agreement with Human Horizons, the Kingdom is attracting global automakers and building a competitive manufacturing base.”
Seitz highlighted the $9 billion allocated to EV-related materials, including $900 million from EV Metals and $126 million from Ivanhoe Electric, as evidence that the Kingdom is leveraging its $2.5 trillion in untapped mineral reserves to ensure it has access to the critical resources needed for production.
Mazin Jameel, managing director of marketing operations at Abdul Latif Jameel Motors, told Arab News that Saudi Arabia is taking a comprehensive approach to boosting EV adoption by developing a widespread charging network through public and private partnerships with leading technology providers.
“These investments in charging infrastructure are complemented by large-scale renewable energy projects, including solar and wind farms, which will provide clean energy for EV charging,” said Jameel.
He added: “Additionally, the government is introducing regulatory frameworks, financial incentives and policy support to accelerate EV adoption among consumers. These steps reflect Saudi Arabia’s comprehensive approach to fostering a sustainable and future-ready transportation ecosystem.”
The Kingdom is already working on integrating artificial intelligence and automation into the automotive sector, ensuring a more efficient production process.
As part of these efforts, Saudi Arabia is fostering partnerships with global tech firms to enhance the digital infrastructure required for smart mobility solutions.
The integration of AI-driven analytics in EV production will help in optimizing supply chain management and improving vehicle efficiency, positioning Saudi Arabia at the forefront of next-generation mobility innovation.
EVs, fast chargers and a high-tech future
Saudi Arabia is not solely relying on the government to propel the EV industry forward. It is keen to work with the private sector to ensure the sector has solid foundations to blossom.
Ahmad Al-Tawbah, CEO of Motory, told Arab News that private sector expertise in technology and operations is being complemented by public investment in infrastructure, policies and incentives.
Through significant investments, the Kingdom is attracting global automakers and building a competitive manufacturing base.
Heiko Seitz, PwC Global and Middle East eMobility leader
“In Saudi Arabia, initiatives like the establishment of advanced manufacturing zones, such as NEOM and KAEC, showcase how PPPs can create a thriving ecosystem for automotive assembly, EV production and battery manufacturing,” he said.
Al-Tawbah added that PPPs are crucial in reshaping the supply chain ecosystem.
“They encourage local suppliers to integrate into the global automotive value chain, fostering the growth of local industries, such as component manufacturing and logistics,” he added.
By focusing on localized production, these partnerships help decrease reliance on imports while strengthening Saudi Arabia’s role in regional supply chains. This approach not only satisfies domestic demand, but also enhances the Kingdom’s position as a key export hub for the Middle East and beyond.
Powering jobs and turbocharging the economy
Saudi Arabia’s booming EV sector is not just about seeing cars on the road; it also has the potential to deliver tens of thousands of jobs in engineering, manufacturing, logistics and software development — directly supporting Vision 2030’s objective of increasing employment.
Abdul Latif Jameel Motors’ Jameel said: “Additionally, the automotive ecosystem will provide opportunities for local entrepreneurs and small businesses to participate in the supply chain at all levels of manufacturing, distribution and related logistics, contributing to economic growth and innovation within the sector.”
Ceer Motors, the first Saudi automotive brand, is projected to create 30,000 jobs by 2034, contributing about $8 billion to gross domestic product.
“The Kingdom is investing heavily in workforce upskilling, with over 600,000 Saudis set to benefit from education and training programs,” Seitz said.
Additionally, Saudi Arabia is collaborating with leading universities and research institutions to develop specialized programs in EV technology, battery science and smart mobility solutions.
These initiatives are designed to equip the local workforce with the expertise needed to drive innovation in the automotive sector and position Saudi talent at the heart of future developments.
Luring big players and powering up local brands
As part of its focus on the industry, Saudi Arabia is rolling out the red carpet for global automakers while giving homegrown brands a serious boost.
With enticing financial perks and smart policies, the Kingdom is making it hard for car giants to say no. “Programs like the $2.6 billion Standard Incentives Program provide funding of up to 35 percent of project investments — capped at SR50 million ($13.33 million) per project. Additionally, Lucid Motors received $3.4 billion in financing over 15 years to establish a plant targeting 155,000 EVs annually,” Seitz said.
These steps reflect Saudi Arabia’s comprehensive approach to fostering a sustainable and future-ready transportation ecosystem.
Mazin Jameel, managing director of marketing operations at Abdul Latif Jameel Motors
He added: “The PIF has also invested $1 billion in Lucid and is backing Ceer Motors. These financial incentives, coupled with regulatory frameworks such as industrial licensing and quality standards certification, create a supportive ecosystem for both international and local manufacturers.”
The Kingdom’s automotive strategy extends beyond production to include research and development in next-generation mobility solutions.
“We’ve teamed up with KAUST and Toyota to push hydrogen fuel research forward, launching Saudi Arabia’s first hydrogen-powered taxi pilot with the Toyota Mirai — big steps toward a cleaner, high-tech transport future,” Jameel said.
Competing on the global stage and challenges
Saudi Arabia is not just joining the global electric vehicle race; it is aiming for pole position. With massive investments, a prime geographic location and a strategy that blends innovation with economic muscle, the Kingdom is shifting gears fast.
“Coupled with the Kingdom’s geographic advantage as a gateway to Asia, Europe and Africa, these efforts are positioning Saudi Arabia as a key export hub for the automotive sector,” Seitz said.
Scaling up Saudi Arabia’s automotive sector also has its own hurdles, but the Kingdom has a game plan.
“To address the lack of a local supply chain, incentives are attracting global suppliers and fostering component manufacturing. Workforce development is a priority, with programs like NAVA training over 600,000 citizens in advanced automotive technologies,” said Seitz.
Another crucial piece of the puzzle, infrastructure expansion, is being “rapidly developed,” Seitz said, highlighting plans to install 5,000 EV fast chargers by 2030 through the Electric Vehicle Infrastructure Co. — a joint-venture company between the PIF and Saudi Electricity Co.
Regulatory frameworks are also being aligned with international standards, while purchase incentives and awareness campaigns are encouraging more drivers to go electric.
Seitz said that investment in Lucid alongside partnerships with global players like Foxconn and Hyundai show that Saudi Arabia is overcoming challenges to solidify its position as a “global automotive powerhouse under Vision 2030.”
