How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 

US-based electric vehicle maker Lucid Group, majority owned by Saudi Arabia’s Public Investment Fund, will set up its first overseas factory in the Kingdom as regional demand for EVs accelerates. (AFP)
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Updated 14 March 2023
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How Saudi Arabia’s investments are driving electric vehicle adoption in the Middle East 

  • Saudi investments in EV production are expected to reach $50 billion over the next decade
  • At least 30 percent of the vehicles on the road in Riyadh are expected to be electric by 2030

DUBAI: Although the electric-vehicle market in the Middle East is still in its infancy, the global rollout of new EV models is accelerating their adoption in the region as governments and consumers embrace the transition away from the internal combustion engine.

A new study by Goldman Sachs predicts that EVs will make up about half of new car sales worldwide by 2035. “While the EV sector is beset by some major crosscurrents . . . our strategists expect technology innovation to supersede these forces in the coming years,” says the report by Goldman Sachs Research.

Meanwhile, as increased competition, government incentives and falling prices of battery-related products and vehicle components make EVs more affordable, the likelihood grows of at least some models becoming as cheap as vehicles with IC engines before the year ends.




STC Group Announces Partnership with #Lucid LLC for Connectivity Services for Lucid Vehicles in KSA. (Supplied)

While Elon Musk’s Tesla brand currently leads the Middle East EV market, among the electric models that can be found in the region are the MG ZS EV, Renault Zoe E-Tech and the Volvo XC40 Recharge Pure Electric, alongside the recently launched Swedish brand, Polestar.

The increasing focus on EV adoption, including in the Arab Gulf states, is largely driven by national commitments to accelerate the transition from fossil fuels to renewable energy sources to achieve net-zero targets within the coming decades.

This transition will not happen overnight, however, as the Gulf countries still need to increase greatly the number of charging stations available for these new vehicles — to give EVs sufficient range and to incentivise consumers to buy electric.

“The market for electric vehicles is expected to grow across the region, driven largely by the continued government-led reforms, specifically in building infrastructure to allow consumers to travel long distances,” Tom Lee, managing director of MG Motor Middle East, told Arab News.

According to market research firm Mordor Intelligence, the Middle East and African EV market was valued at $40.25 million in 2021, and is expected to reach $93.10 million by 2027, registering a compound annual growth rate of more than 15 percent during the forecast period.

The numbers are remarkable considering that the global EV market suffered a major setback during the COVID-19 pandemic, which saw the closure of several manufacturing units and the start of a global semiconductor chip shortage, which continues to impact industries to this day.

Sales of zero-emissions vehicles have since bounced back worldwide, doubling in 2021 from the previous year, marking a new record at just under 7 million cars — equivalent to 10 percent of all car sales, according to the Global EV Outlook, published by the Electric Vehicles Initiative.

The same was the case in 2022, when global sales of EVs steadily increased, with 2 million cars sold in just the first quarter. This year, EV market revenues are projected to reach $322.50 million.

“Education of consumers (in the region) has rapidly increased, driven by GCC countries’ renewable energy plans and the drop in the price of electric vehicles,” Lee told Arab News.

This awareness is likely to grow when the UAE hosts the UN Climate Change Conference, COP28, in November, coinciding with its “Year of Sustainability.” Lee says the UAE’s manufacturing plans are also a lucrative investment opportunity.

Currently, eco-friendly or hybrid vehicles make up some 50 percent of the Dubai Roads and Transport Authority’s taxi fleet. A five-year plan has been launched to have only hybrid, electric or hydrogen-powered taxis on the emirate’s roads by 2027.

Launched in 2016, Ekar, the region’s first mobility company and self-drive super app, has jumped on the EV bandwagon, adding 10 Teslas to its fleet available for rent in Dubai and five additional Teslas available in Abu Dhabi’s Masdar City.

“EVs are exceptionally good cars for car sharing,” Vilhelm Hedberg, co-founder and CEO of Ekar, told Arab News.

“There are fewer moving parts in an EV compared to an internal combustion engine car, which has a ton of different opportunities for failure, maintenance and issues to arise, making the vehicle off-road time much lower in EVs.”




Vilhelm Hedberg, founder of Ekar, believes the region is ‘heading in the right direction’ with EV. (Supplied)

At present, there are about 325 charging stations for EVs across the UAE, catering for less than 1 percent of all vehicles registered in the country. However, Hedberg believes the number of EVs on the road will rise over the next couple of years.

“There’s a global readiness equation that’s calculated for EVs and the UAE finds itself ranked eighth in the world,” he said. Norway, China, Germany, Singapore and the UK take the top five rankings for EV market share.

“(Because of) the very fact that the UAE has the infrastructure already beginning to be laid out, it is headed in the right direction.”

With total Saudi investments in EV production expected to reach $50 billion over the next decade, the hope is that least 30 percent of the vehicles on the road in Riyadh will be electric in the next seven years.

“The Saudi public has a strong affinity for their cars. There’s so much enthusiasm for classic cars and for iconic car models,” a spokesperson for Ceer, Saudi Arabia’s first homegrown EV brand, told Arab News.




Ceer, Saudi Arabia’s first homegrown electric vehicle brand, has a production target of 170,000 cars a year. (Supplied)

According to the spokesperson, Saudis “also have a strong affinity for technology” and, therefore, will look to adopt new concepts.

“You can find battery electric vehicles on the streets of Dammam, Jeddah and Riyadh even though many brands don’t sell BEVs officially in Saudi Arabia today,” the spokesperson said, referring to fully electric vehicles with rechargeable batteries and no petrol engine.

Claiming that Ceer’s research on consumer insights revealed a strong interest in the company’s portfolio of vehicles, the spokesperson said: “The interest is both due to the vehicles’ iconic design and infotainment features, but also due to a host of other factors, including value for money, total cost of ownership, and increasing awareness of topics related to sustainability.”

In 2020, there were more than 15 million registered vehicles in the Kingdom. Four-fifths of these were cars or light vehicles. According to the Saudi Energy Efficiency Center, the transport sector consumed about 21 percent of the Kingdom’s total energy that year.


Saudi Arabia plugs into the future




Saudi women test-drive an electric a car manufactured by Lucid Group at the KSA Green Transition Journey exhibition in the Red Sea port of Jeddah. (AFP)

  • With 61 percent of shares, Saudi Arabia is the majority owner of Lucid Group through its Public Investment Fund, or PIF. Set to be built in King Abdullah Economic City on the Red Sea coast, Lucid’s first overseas manufacturing plant will initially reassemble Lucid Air vehicle “kits” manufactured in Arizona, the US.
  • Eventually, the plant will build complete vehicles with a planned peak capacity of 150,000 vehicles a year. Saudi Arabia’s first homegrown EV brand, Ceer Motors, was launched late last year by Crown Prince Mohammed bin Salman.
  • Also backed by PIF, Ceer will be among the first automotive brands to produce EVs in Saudi Arabia, with plans to sell a range of vehicles for consumers both in the country and the Middle East and North Africa region. The first units are expected to become available in 2025.
  • With a production target of 170,000 cars a year, Ceer is expected to create up to 30,000 direct and indirect jobs in the region, and directly contribute $8 billion to Saudi Arabia’s GDP by 2034.
  • The Kingdom’s giga-projects, such as Qiddiya, Roshn and NEOM, have plans to deploy fleets of EVs, produced in time by the Lucid and Ceer factories in King Abdullah Economic City.




Throughout the event, Schneider Electric is highlighting its portfolio of EVlink chargers, including its latest EVlink Smart Wallbox charging stations. (Supplied)

To support the transition from traditional petrol engines to electric mobility, Mohamed Shaheen, KSA and Yemen cluster president at Schneider Electric, believes a strong energy management infrastructure is essential.

The EVlink smart charger launched in the region last year is just one of many next-generation products that will help build a more sustainable energy matrix for the future, he told Arab News.

According to Shaheen, although the cost of an eco-friendly vehicle is markedly lower today than before, simply increasing the number of EVs on the road will not be enough to reduce emissions.

“A smart and sustainable charging experience that can monitor, manage and eventually limit the use of EV charging devices with the aim of optimizing energy consumption can help EVs become even cleaner,” he said.

According to Boston-based Energy Sage, charging an EV is about 3.5 times cheaper per mile than the cost of fueling up a petrol car.

“It is imperative to understand that — in the long term — EV charging is cost-effective,” particularly when steps are taken to develop more sustainable production processes, Shaheen said.

However, despite the growing public readiness for EV adoption in the region, the deciding factor ultimately would be consumers’ willingness to swap their petrol engine vehicle for an electric option.

Surveys show that people are looking for “the reliability and comfort they are used to in traditional engines,” said Lee of MG Motors.

“With the falling prices of EVs and the increase in petrol prices, there has been a fundamental shift in the market.”




Launch event of Ceer, the first Saudi electric vehicle brand, in November 2022. (Supplied)

Pointing to the fluctuations in fuel prices over 2022 as a factor that has influenced consumer decision-making, he said that by 2026 almost 45,000 EVs are expected to be sold in the region.

Fuel bills apart, EVs generally have a strong resale value, which is why more and more people are looking at them as a sound investment, according to Ekar’s Hedberg.

He drew attention to a survey commissioned by Audi Abu Dhabi, which found a change of sentiment among consumers, with 52 percent of UAE residents considering buying an EV.

“But my view of the world is that people shouldn’t own cars,” Hedberg said. “They should treat cars like they treat clothing and interchange them for the various occasions that they need them for,” he said.

Studies show that every car shared removes 17 private cars from the road, he said.

In recent years, the car-sharing trend has caught on in European cities, resonating with people who want to lead a more sustainable lifestyle.

While the same cannot be said for the Middle East region yet, the consensus view of automotive-industry executives is that EVs and new energy vehicles are the way forward.

 

 


Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

Updated 04 July 2025
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Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

LONDON: Stocks slipped on Friday as US President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world’s biggest economy.

The dollar also fell against major currencies with US markets already shut for the holiday-shortened week, as traders considered the impact of Trump’s sweeping spending bill which is expected to add an estimated $3.4 trillion to the national debt.

The pan-European STOXX 600 index fell 0.8 percent, driven in part by losses on spirits makers such as Pernod Ricard and Remy Cointreau after China said it would impose duties of up to 34.9 percent on brandy from the EU starting July 5.

US S&P 500 futures edged down 0.6 percent, following a 0.8 percent overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day holiday.

Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the US, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise sharply.

Investors are “now just waiting for July 9,” said Tony Sycamore, an analyst at IG, with the market’s lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South Korea.

At the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main US equity indexes climbing in a shortened session.

“The US economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here),” Sycamore said.

Following the close, the House narrowly approved Trump’s signature, 869-page bill, which averts the near-term prospect of a US government default but adds trillions to the national debt to fuel spending on border security and the military.

Trade the key focus in Asia

Trump said he expected “a couple” more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so far.

US Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken down.

The US dollar index had its worst first half since 1973 as Trump’s chaotic roll-out of sweeping tariffs heightened concerns about the US economy and the safety of Treasuries, but had rallied 0.4 percent on Thursday before retracing some of those gains on Friday.

As of 2:00 p.m. Saudi time it was down 0.1 percent at 96.96.

The euro added 0.2 percent to $1.1773, while sterling held steady at $1.3662.

The US Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points to 4.34 percent, while the two-year yield jumped 9.3 bps to 3.882 percent.

Gold firmed 0.4 percent to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the US’s fiscal position and tariffs.

Brent crude futures fell 64 cents to $68.17 a barrel, while US West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation. 


World food prices tick higher in June, led by meat and vegetable oils

Updated 04 July 2025
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World food prices tick higher in June, led by meat and vegetable oils

PARIS: Global food commodity prices edged higher in June, supported by higher meat, vegetable oil and dairy prices, the UN Food and Agriculture Organization has said.

The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 128 points in June, up 0.5 percent from May. The index stood 5.8 percent higher than a year ago, but remained 20.1 percent below its record high in March 2022.

The cereal price index fell 1.5 percent to 107.4 points, now 6.8 percent below a year ago, as global maize prices dropped sharply for a second month. Larger harvests and more export competition from Argentina and Brazil weighed on maize, while barley and sorghum also declined.

Wheat prices, however, rose due to weather concerns in Russia, the EU, and the US.

The vegetable oil price index rose 2.3 percent from May to 155.7 points, now 18.2 percent above its June 2024 level, led by higher palm, rapeseed, and soy oil prices.

Palm oil climbed nearly 5 percent from May on strong import demand, while soy oil was supported by expectations of higher demand from the biofuel sector following announcements of supportive policy measures in Brazil and the US.

Sugar prices dropped 5.2 percent from May to 103.7 points, the lowest since April 2021, reflecting improved supply prospects in Brazil, India, and Thailand.

Meat prices rose to a record 126.0 points, now 6.7 percent above June 2024, with all categories rising except poultry. Bovine meat set a new peak, reflecting tighter supplies from Brazil and strong demand from the US. Poultry prices continued to fall due to abundant Brazilian supplies.

The dairy price index edged up 0.5 percent from May to 154.4 points, marking a 20.7 percent annual increase.

In a separate report, the FAO forecast global cereal production in 2025 at a record 2.925 billion tonnes, 0.5 percent above its previous projection and 2.3 percent above the previous year.

The outlook could be affected by expected hot, dry conditions in parts of the Northern Hemisphere, particularly for maize with plantings almost complete. 


Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

Updated 04 July 2025
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Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

RIYADH: Saudi Arabia achieved four consecutive years of growth in venture capital relative to its economy, a feat unmatched among its peers, according to a new report.

Between 2020 and 2023, the Kingdom was the only large market in the sample to post uninterrupted annual gains in VC intensity, contrasting with the more episodic deal flow seen across Africa and parts of Southeast Asia, MAGNiTT’s recently published Macro Meets VC report stated. 

While 2024 saw a slight contraction in funding amid global tightening, Saudi Arabia’s multi-year upward trend signals a sustained commitment to innovation-led diversification.

The Kingdom is steadily consolidating its position as a model for policy-driven venture capital development in emerging markets as it seeks to diversify its economy in line with the Vision 2030 blueprint. 

“Saudi Arabia is becoming the model for long-term, policy-driven ecosystem building,” the report notes, highlighting that sovereign limited partners and local funds have been instrumental in buffering the Kingdom from some of the volatility that struck other emerging venture markets. 

Saudi Arabia’s policy momentum 

The MAGNiTT data revealed that Saudi Arabia recorded a five-year average VC-to-GDP ratio of 0.07 percent. 

Although this figure remains modest compared to more mature hubs like Singapore, its consistent upward movement underscores the growing depth of domestic capital formation. 

Beyond the headline ratios, the Kingdom’s strategic positioning has also come into sharper focus. Saudi Arabia, along with the UAE, is classified as a “Growth Market”— a designation that reflects not only a sizeable GDP and population but also the rising economic clout of local consumer and enterprise demand. 

With a GDP approaching $950 billion and a population exceeding 33 million, Saudi Arabia presents a significant scale advantage. 

According to MAGNiTT’s benchmarking, this size creates “natural expansion targets for startups moving beyond initial launch markets,” supporting both regional and international founders seeking to diversify beyond smaller ecosystems. 

MENA’s uneven progress 

Across the broader Middle East and North Africa region, venture capital activity has continued to evolve unevenly. 

The UAE has retained its reputation as a strategic innovation hub and one of the few “MEGA Markets” in the emerging world, boasting a five-year average VC-to-GDP ratio of 0.20 percent. 

This proportion — identical to Indonesia’s ratio — signifies robust venture activity relative to the economy’s size. 

Yet, while the UAE maintained this level, Saudi Arabia has seen more consistent growth in funding, a dynamic the report attributes to policy-led market development. 

In Egypt, VC has gained further traction over the period under review. Egypt achieved a 25 percent rise in total funding compared to the previous five-year average, lifting its VC-GDP ratio by 0.02 percentage points to 0.11 percent. 

Although Egypt’s overall economic constraints remain acute — GDP per capita still lags below $10,000 — the relative progress suggests improving investor confidence, particularly in fintech and e-commerce. 

However, the report cautions that deal flow in Egypt, much like in Nigeria, remains fragile and prone to episodic swings driven by a handful of large transactions. 

The macroeconomic context across MENA has also been influential. Elevated oil price volatility and the impact of the Israel–Iran conflict have created a challenging backdrop for policymakers. 

Brent crude surged more than 13 percent in a single day earlier in 2025, underscoring the region’s exposure to external shocks. 

Nevertheless, both Saudi Arabia and the UAE managed to maintain monetary policy stability in line with the US Federal Reserve’s cautious stance. 

Saudi Arabia kept its benchmark rate at 5.5 percent, supported by inflation trending around 2 percent, while the UAE held steady at 4.4 percent. 

These decisions reflected a delicate balance between containing price pressures and supporting economic diversification efforts. 

Overall, MENA’s five-year aggregate venture funding reached $12.52 billion. Although this total remains well below the levels seen in more mature regions, it represents a meaningful share of emerging markets capital. 

MENA also posted the highest deal count relative to its peers in Southeast Asia and Africa over the period, indicating a broader base of early-stage transactions even as late-stage funding remains more limited. 

The report emphasizes that expanding geographic and sectoral reach within MENA will be critical to boosting efficiency metrics. 

“VC remains heavily concentrated in a few sectors and cities,” the report observes, warning that without broader inclusion, capital intensity will struggle to match potential. 

Southeast Asia’s VC benchmark 

Beyond MENA, Southeast Asia’s ecosystem stands out as the most mature among emerging venture markets, driven primarily by Singapore’s exceptional performance. 

Over the 2020–2024 period, Singapore achieved a 5-year average VC-to-GDP ratio of 1.3 percent, surpassing not only all emerging markets but also developed economies such as the US, which registered 0.79 percent, and the UK, with 0.73 percent. 

Even with a 5.4 percent decline in total funding compared to the prior five years and a 0.19 percentage point drop in VC-GDP ratio, Singapore maintained unmatched capital efficiency. 

The report describes the city-state as “a benchmark for capital efficiency in venture ecosystems,” attributing this strength to strong regulatory frameworks, institutional capital participation, and a deep bench of experienced founders and investors. 

Indonesia, Southeast Asia’s largest economy, recorded total VC funding volumes nearly twice as large as Singapore’s over five years, but its relative VC-GDP ratio remained lower at 0.2 percent. 

This dynamic illustrates one of the report’s core findings: venture capital inflows correlate more strongly with GDP per capita than total GDP. 

In Indonesia’s case, while its GDP surpassed $1.2 trillion, GDP per capita hovered around $4,000, constraining purchasing power and, by extension, startup revenue potential. 

Thailand, meanwhile, reported funding gains due mainly to a single mega deal rather than systematic improvements in ecosystem depth. 

In Africa, Nigeria emerged as an unexpected bright spot in 2024, as a single major transaction lifted its VC-GDP ratio to 0.15 percent — the highest in the region for that year. 

However, this outlier result also revealed the episodic nature of capital deployment in developing markets. 

Kenya registered a relatively high five-year VC-GDP ratio of 0.3 percent, even as absolute funding volumes remained modest. 

The report notes that in low-GDP contexts, this ratio can overstate ecosystem maturity. 

South Africa and Egypt showed more modest growth trajectories, weighed down by persistent inflation, structural constraints, and capital scarcity. 

In aggregate, African economies continued to lag both Southeast Asia and MENA in total venture funding and deal velocity. 

Global challenges ahead 

Globally, the five years covered by the report were marked by intensifying volatility. 

High interest rates, trade tensions, and geopolitical uncertainty weighed on capital flows. 

The US Federal Reserve held its policy rate between 4.25 percent and 4.5 percent through mid-2025, citing “meaningful” inflation risks. 

The European Central Bank moved to lower its deposit rate to 2 percent, reflecting cooling inflation but acknowledging sluggish growth. 

The World Bank cut its global GDP forecast for 2025 to 2.3 percent, the weakest pace since the 2008 crisis, excluding recessions. 

These headwinds contributed to the decline in venture capital across most emerging markets in 2024. 

In response, sovereign capital and strategic investors have become increasingly important backstops. 

The report highlights that domestic capital formation in MENA has partially offset declining global risk appetite. 

However, these funds tend to be slower moving, more sector-concentrated, and less risk-tolerant than international investors. 

“Without renewed foreign inflows or regional exit pathways, deal velocity may remain muted into the second half of 2025,” the report warns. 

This environment is likely to force startups to extend runway and compel general partners to adopt more selective deployment strategies. 

Despite the challenges, the outlook for Saudi Arabia and other growth markets remains constructive over the medium term. 

The Kingdom’s policy clarity, deepening institutional capital pools, and Vision 2030 commitments create a foundation for continued expansion. 

As the report concludes: “High GDP markets like KSA and Indonesia trail in VC efficiency — suggesting capital underutilization.” 

Closing this gap between potential and realized funding will be the defining challenge for emerging ecosystems as they navigate a turbulent global landscape.


Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

Updated 04 July 2025
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Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

LONDON: Oil futures fell slightly on Friday after Iran reaffirmed its commitment to nuclear non-proliferation, while major producers from the OPEC+ group are set to agree to raise their output this weekend.

Brent crude futures were down 49 cents, or 0.71 percent, to $68.31 a barrel by 11:31 a.m. Saudi time, while US West Texas Intermediate crude fell 41 cents, or 0.61 percent, to $66.59.

Trade was thinned by the US Independence Day holiday.

US news website Axios reported on Thursday that the US was planning to meet with Iran next week to restart nuclear talks, while Iran Foreign Minister Abbas Araqchi said Tehran remained committed to the nuclear Non-Proliferation Treaty.

The US imposed fresh sanctions targeting Iran’s oil trade on Thursday.

Trump also said on Thursday that he would meet with representatives of Iran “if necessary.”

“Thursday’s news that the US is preparing to resume nuclear talks with Iran, and Araqchi’s clarification that cooperation with the UN atomic agency has not been halted considerably eases the threat of a fresh outbreak of hostilities,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Araqchi made the comments a day after Tehran enacted a law suspending cooperation with the UN nuclear watchdog, the International Atomic Energy Agency.

OPEC+, the world’s largest group of oil producers, is set to announce an increase of 411,000 bpd in production for August as it looks to regain market share, four delegates from the group told Reuters.

Meanwhile, uncertainty over US tariff policies resurfaced as the end of a 90-day pause on higher levy rates approaches.

Washington will start sending letters to countries on Friday specifying what tariff rates they will face on goods sent to the US, a clear shift from earlier pledges to strike scores of individual trade deals.

President Trump told reporters before departing for Iowa on Thursday that the letters would be sent to 10 countries at a time, laying out tariff rates of 20 percent to 30 percent.

Trump’s 90-day pause on higher US tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the EU and Japan.

Separately, Barclays said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand. 


EV maker Lucid’s quarterly deliveries rise but miss estimates

Updated 03 July 2025
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EV maker Lucid’s quarterly deliveries rise but miss estimates

  • Lucid delivered 3,309 vehicles in the quarter ended June 30

LONDON: Electric automaker Lucid on Wednesday reported a 38 percent rise in second-quarter deliveries, which, however, missed Wall Street expectations amid economic uncertainty.

Demand for Lucid’s pricier luxury EVs have been softer as consumers, pressured by high interest rates, shift toward cheaper hybrid and gasoline-powered cars.

Lucid delivered 3,309 vehicles in the quarter ended June 30, compared with estimates of 3,611 vehicles, according to seven analysts polled by Visible Alpha. It had delivered 2,394 vehicles in the same period last year.

Saudi Arabia-backed Lucid produced 3,863 vehicles in the quarter, missing estimates of 4,305 units, but above the 2,110 vehicles made a year ago.

The company stuck to its annual production target in May, allaying investor worries about manufacturing at a time when several automakers pulled their forecasts due to an uncertain outlook.

US President Donald Trump’s tariff policy has led to a rise in vehicle prices as manufacturers struggle with high material costs, forcing them to reorganize supply chains and produce domestically.

Lucid’s interim CEO, Marc Winterhoff, had said in May that the company was expecting a rise of 8 percent to 15 percent in overall costs due to new tariffs.

The company’s fortunes rest heavily on the success of its newly launched Gravity SUV and the upcoming mid-size car, which targets a $50,000 price point, as it looks to expand its vehicle line and take a larger share of the market.

Deliveries at EV maker Tesla dropped 13.5 percent in the second quarter, dragged down by CEO Elon Musk’s right-wing political stances and an aging vehicle line-up that has turned off some buyers.