In recent years, Saudi Arabia and Egypt have accelerated large-scale initiatives aimed at localizing the automotive industry, especially in the fast-growing electric vehicle (EV) sector. These moves are reshaping the Arab automotive landscape and positioning the two countries as regional leaders in manufacturing and innovation.
Saudi Arabia: King Salman Automotive Cluster and Ceer Motors
Saudi Arabia announced the King Salman Automotive Cluster in King Abdullah Economic City (KAEC) as a flagship hub to attract both local and global car manufacturers. The cluster is set to host major players such as Ceer Motors—the Kingdom’s first homegrown EV brand—and Lucid Motors, which opened its first overseas plant in Saudi Arabia in 2023.
The Saudi Public Investment Fund (PIF) has sealed partnerships with Hyundai to establish an advanced manufacturing facility, and with Pirelli to set up a tire factory. These projects are expected to add SAR 92 billion to the Kingdom’s GDP by 2035 and generate thousands of jobs, aligning with Vision 2030 and its diversification goals.
Ceer Motors, a joint venture between PIF and Foxconn, designs and manufactures EVs using licensed BMW technology. It promises high local content, modern design, and thousands of job opportunities for Saudis. Meanwhile, Saudi Arabia aims for EVs to account for 30% of new car sales by 2030, supported by the Saudi Green Initiative and incentives to attract foreign investors.
Egypt: National Strategy 2030 and Local EV Manufacturing
Egypt has also unveiled a National Automotive Strategy under its “Egypt Vision 2030.” In 2022, Cairo introduced the Automotive Industry Development Program (AIDP), which includes incentives for local manufacturers, a Supreme Automotive Council, and a fund dedicated to supporting eco-friendly vehicles.
The government’s targets are ambitious: increase annual production from around 95,000 cars today to 400,000 units by 2030, with 25% allocated for export. Egypt also aims to raise local content to 60%. To achieve this, Egypt has partnered with global players such as Volkswagen, FAW, MG (SAIC Motors), and state-owned El Nasr Automotive, which plans to produce the first locally manufactured EV at a rate of 20,000 cars annually.
The country has already rolled out 3,000 EV charging stations, provided buyer incentives, and is pushing forward with an EV ecosystem supported by research centers and financing programs.
Comparing with Other Arab Countries
- United Arab Emirates: Dubai’s M Glory Group is building the UAE’s first EV factory with a capacity of 55,000 cars annually, investing AED 1.5 billion. Its first model, the DMV300, will be exported across the Gulf and Africa. The UAE also offers green incentives, including road-toll exemptions and free parking for EVs.
- Morocco: Already a global manufacturing hub, Morocco produces 700,000 cars annually, aiming for 1 million by 2025. In 2025 alone, EV production grew 53% to 107,000 units. The country is also building its first local battery plant, reinforcing its strong ties with Europe.
- Algeria: Signed a $105 million deal with Jetour (China) to build a plant in Batna with capacity above 270,000 units annually. Algeria is negotiating with 13 more manufacturers to strengthen its industrial base.
- Jordan: Partnered with M Glory (China/UAE) to invest $550 million in EV factories across Jordan, Egypt, and the UAE. The plan includes annual output of 40,000 EVs, technology transfer, and battery supply initiatives.
Economic and Environmental Impact
These investments promise huge economic returns:
- In Saudi Arabia, the King Salman Cluster alone could add $24.5 billion (SAR 92B) to GDP by 2035.
- In Egypt, car exports are expected to bring in up to $4 billion annually by 2030.
- Across North Africa and the Gulf, EV adoption is directly linked to sustainability goals, reduced carbon emissions, and job creation in high-value industries.
Environmentally, projects like Ceer Motors and Egypt’s EV rollout align with green transition strategies. Morocco, for example, integrates renewable energy with auto manufacturing, aiming for 50% of electricity from clean sources to power its car plants.
Challenges Ahead
Despite the momentum, challenges remain. Many Arab countries still lack fully integrated supply chains, forcing manufacturers to import key components, which raises costs. Attracting global automakers requires consistent policies, tax incentives, and currency stability.
Competition is also fierce: Morocco’s established export base gives it an edge in European markets, while Gulf states leverage financial power and logistics. Building homegrown brands such as Ceer in Saudi Arabia or El Nasr in Egypt will require strong marketing, innovation, and global competitiveness.
The localization of the automotive industry in Saudi Arabia and Egypt is more than an industrial project—it is a strategic move for economic diversification, sustainability, and regional leadership. With billions invested, new plants under construction, and rising EV adoption, the Arab world is entering a new era where cars are not only imported but designed, built, and exported from Arab soil.
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