Traditional car manufacturers, new electric vehicle (EV) players, technology companies and mobility providers are all competing for future transport and mobility revenue streams, while also negotiating complex regulation and decarbonisation ambitions.

The future of transport will continue to make significant changes to how we commute on a day to day basis, but also provide a range of new opportunities as the transportation sector creates new investment, wealth creation opportunities and environmental opportunities. Whether the impact is felt as a privately owned electric vehicle, ride-sharing through Uber, membership of a car share scheme or even just temporary usage of electric scooters, it is undeniable that transportation has changed significantly over the past decade.

Saudi Arabia was an early believer in the opportunities presented by alternative transportation, and recently announced that it is in talks with several carmakers about commencing manufacturing operations within the country, with an announcement expected this year. This showcases the government's ambition to incubate new industries and diversify the economy in line with Vision 2030, also encouraging foreign investment in the Kingdom at the same time.

The intentions to support the industry are also demonstrated by the early support in emerging automotive technology by the Public Investment Fund (PIF). In 2018 they invested in Lucid, a US-based electric vehicle manufacturer which aims to compete with Tesla and is building a ground-up range of premium electric vehicles. PIF were an early investor in the company who has just brought their first car to market in October 2021.

There is rationale behind supporting the diversification of transport options, and global battery electric vehicle volumes are expected to increase by more than 5x by 2025 according to IHS Markit, with additional upside if manufacturers achieve their own product range targets. If

government continue to implement electric vehicle friendly policy changes then the growth rates may be even higher.

In addition to the manufacturer and government support for electric vehicles, there is also growing consumer acceptance of electric vehicles as a method of transportation. This was shown in a recent survey completed by AlixPartners, the global consulting firm, who found in a multi-country consumer survey that ‘Electric Vehicle Believers’ those people very likely to buy a electric car as their next vehicle have more than doubled in the past two years, from 11% to 25% globally and from 5% to 19% in the U.S. Interestingly, these buyers are almost three times as likely to prefer an online ownership experience, spanning purchase and car administration.

As a mature car-loving market, Germany also represents a good example of the growth that can be seen as electric vehicle acceptance as it reaches a tipping point. Full electric vehicle penetration in Germany was around 11% in first half of 2021, up from 4% a year earlier. Plug-in Hybrid electric vehicle (PHEV) penetration was around 12% up from 4% one year earlier.

The support provided by Saudi Arabia in incubation of electric vehicle providers and PIF investing in the industry represent very positive signs about the growth of the electric vehicle market within the Kingdom, and the possible development of a whole new manufacturing industry in the Kingdom is an exciting possibility.