The Impact of Electric Vehicles on Environment and Economy in Saudi Arabia

Abstract

The overreliance of oil as the cornerstone of economy and the main pillar of development has led to economic led to increased pollution in the Kingdom of Saudi Arabia. Across the world, governments have identified electric vehicles (EVs) as a technology that cut the levels of gaseous emissions from transport industry. The purpose of this research paper was to investigate the impact of EVs in the KSA. Systematic article search was conducted in various databases, including PubMed, Google Scholar, Web of Science, and Science Direct. Due to the limited amount of peer reviewed articles reporting on the impact of EVs on environment and economy in the KSA, article search was extended to scholarly sources including official reports from research organizations, and dissertations. Articles that fit the inclusion criteria for analysis show that EVs in Saudi Arabia have positive effects on the environment due to the reduced net carbon emission. Also, the KSA benefits from the presence of EVs in the KSA due to stimulation of GDP growth and cost effectiveness of these outomobile over conventional vehicles. Recommendations for future research and policies to accelerate EV adoption in the KSA are provided.

Due to the increasing need to combat global warming, governments are turning to renewable energy technologies to reduce gaseous emissions. Among the technologies that have been identified as having the potential to protect the environment and positively impact the environment is electric vehicles (EVs). In the Middle East, the adoption of electric cars has been growing over the years as the governments respond to the heavy reliance on fuel as the economic fuel of the countries. In 2016, the leader of the Kingdom of Saudi Arabia (KSA) dramatically launched the Saudi Vision 2030 that envisions a country less reliant on oil (Molavi, 2018). In line with this plan, Saudi Arabia targets to ensure that 30% of the vehicles in the capital city are electrified by 2030 (Gnana, 2021). Such a plan could positively impact the environment given the relationship between the transportation sector and air pollution. Also, the automotive industry, transportation, and energy interact to form critical parts of the economy.

The government has shown commitment to increasing the adoption of EVs in the country, including approving the importation of electric vehicles from various manufacturers (Sindi et al., 2021). Despite such efforts, the penetration of EVs in Saudi Arabia has been lower than in other countries in the Gulf region. For instance, DUBAI has over 4000 EVs and more than 200 battery charging stations across its road network (Sindi et al., 2021). The uptake of EVs in Saudi Arabia has shown a mixed trend. Between 2008 and 2015, there was a consistent growth in the country’s electric vehicle sales. Following 2015, sales dropped rapidly until 2018, with the sales beginning to rise in 2019 (Sindi et al., 2021). Understanding how electric vehicles impact the environment could be beneficial in showing the need for policies that favor the EV industry as well as the change in consumer behavior towards adopting this technology. This study investigates the impact of electric vehicles on the environment and economy in Saudi Arabia.

Problem Statement

Air pollution represents one of the critical issues affecting the Kingdom of Saudi Arabia. The International Association for Medical Assistance to Travelers (IAMAT) (2020) notes that in 2000, the amount of carbon IV oxide emissions was estimated to be 257970 Gg. Seventy-four percent of these emissions were generated in the industries and 92.1 percent by the energy sector. The three major sources of air pollution in the energy category were petroleum refining, desalination plants, road transportation, and electricity which accounted for about 85, 11%, 21%, and 33% of the total Carbon IV Oxide emissions. Saudi Arabia’s air quality does not meet the minimum standards of international health agencies. According IAMAT (2020, para. 1), “the air quality in Saudi Arabia is considered unsafe - the most recent data indicates the country's annual mean concentration of PM2.5 is 88 µg/m3.” The value exceeds the maximum of 10 µg/m3 recommended by the World Health Organization (WHO).

Due to the increasing trends of population growth, rapid development and urbanization, and high living standards in the KSA, energy demand in the transportation sector has increased. The rising fuel consumption in the KSA’s roads represents a significant drawback for the country seeking to pursue its Vision 2030 goal of being less reliant on oil in driving the economy. Statistics indicate that road transport is responsible for almost a quarter of the energy used in Saudi Arabia. Data from the transport ministry shows that 12 million vehicles in Dubai’s roads consume around 910000 fuel barrels daily (Arab News, 2018). If appropriate interventions are not instituted, fuel demand in KSA's road transport is expected to considerably increase in the future. Specifically, by 2030, the number of vehicles on Saudi roads is projected to reach twenty-six million while diesel and fuel consumption will be 1.86 million barrels/day (Arab News, 2018 para. 3. The heavy fuel use in Saudi roads has led to negative impacts on the environment.

Road transport represents one of the major sources of air pollution in the KSA. In 2000, Saudi Arabia reported 104200 tones, 56 million tones, 470 tons, and 10.42 tons of methane (CH4), Carbon IV Oxide (CO₂), and nitrous oxide (N2O), respectively in road transportation emissions (Rahman et al., 2017 p.815). The level of emissions has been growing since then. In 2010, the estimated emission associated with the road transport of N₂O, CH₄, and CO₂ were 830 tones, 18190 tons, and 98.12 million tons, respectively. In 2012, Saudi Arabia’s transportation sector accounted for nearly 26 percent of all GHG emissions. The sector was second in the categories that contribute to GHG emissions in the country after electricity generation.

One of the factors contributing to the high GHG emission levels from the transportation sector in Saudi Arabia is the heavy reliance on cars. The number of fuel-dependent automobiles in the KSA has been increasing over the years. The total number of cars in the country increased from 22805 to 6.8 million in 2008 (Rahman et al., 2017 p.816). The factor shows an opportunity for EVs to reduce energy levels without altering citizens’ living standards while positively impacting the economy. In recent years, Saudi Arabia's leadership has geared up its efforts to foster the penetration of EVs in the kingdom, driven by the urgent need to reduce air pollution and spur economic growth. Therefore, it is critical to examine whether electric vehicles are contributing to environmental sustainability and economic development.

Literature Review

EVs are categorized into three types: battery EVs (BEVs), plug-in hybrid EVs (PHEVs), hybrid EVs (HEVs), and fuel cell electric vehicles (FCEVs). BEVs entirely run on a battery and an electric drive train. Such vehicles do not have an internal combustion engine. A battery pack is used to store energy. The battery is typically recharged from the mains electricity through a charging unit and a plug which can either be fitted on the charging point or carried on board (Larminie and Lowry, 2012, p. 19). The HEV is referred to as the parallel or standard hybrid. In these cars, the internal combustion (IC) engine derives power from fuel such as diesel or gasoline while the battery supplies energy to the motor. The IC engine working together with the electric motor gives the final drive to the wheels (Larminie and Lowry, 2012, p.20). On the contrary, PHEVs have a series-hybrid arrangement. Such cars are unique since they offer the user a fuel choice. PHEVs include Chevy Volt, Mercedes GLE550e, Kia Optima, Porsche Cayenne S E-Hybrid, Audi A3 E-Tron, among others. An FCEV car uses the "fuel cell technology" to provide zero emissions. In these vehicles, the fuel's chemical energy is directly converted into electrical energy that propels the automobile (Larminie and Lowry, 2012, p.24). Vehicles that use this technology include Riversimple Rasa, Hyundai Tucson, Hyundai Nexo, and Toyota Mirai.

Consumers are likely to adopt electric vehicles based on their perceived advantages constructed around multiple factors. The theory of planned behavior (TPB) explains consumer uptake of a particular good such as an electric vehicle (Zhang et al., 2018). Notably, TPB provides that a person’s behavioral intent to engage in a pre-planned action is jointly influenced by their attitudes, perceived behavioral control, and subjective norm. Concerning EV purchase based on TPB, the interaction of individual perception towards benefits to self, costs involved, and environmental impact has been widely explored. Zhang et al. (2018) investigated consumers' motivation and perception toward risks, environmental benefits, and incentive policies in influencing the adoption of EVs. Data were collected using a three-part questionnaire whose second part assessed whether and how the participants' perceptions of risks, environmental benefits, and economic benefits influence of electric vehicle purchase intention. Study respondents were 264 MBA students. Findings showed that perceived impact on the environment and economic benefits are key factors that influence people to acquire electric vehicles.

Besides, past studies have explored the potential impact of EV adoption on the environment and the economy. Relative advantage, meaning the degree to which the dominant or conventional technology is viewed as inferior to new technology, significantly influences people’s decisions on what extent, how, and when to adopt the new technology. Ghasri, Ardeshiri, and Rashidi (2019) conducted a study to investigate the influence of perception-related factors on consumer reception for EVs. Data was gathered through a survey involving 1076 respondents in Australia and New South Wales. Apart from safety and safety design, findings established that consumers from generations X, Y, and Z have a higher probability of adopting EVs if they perceive the new technology as beneficial to the environment. The rising global temperatures and consequently the need for sustainable processes can explain these results. Across the world, consumers are becoming increasingly environmentally conscious. Although the uptake of electric vehicles can be hindered by other factors such as familiarity with internal combustion engines (ICE), higher acquisition costs, and unfavorable government policies, the extent to which consumers believe electric cars will positively or negatively affect the environment is key to shaping their adoption of such cars.

Knowledge of the relationship between electric vehicles and the environment has been growing since the evolution of the new car technology. Existing literature shows that electric vehicles have the potential to reduce environmental pollution. Requia et al. (2017) conducted a comprehensive literature review to establish the effect of the electrification of road transport on GHG emissions and air pollutants. Regarding air pollutants, results showed that the adoption of EVs leads to a moderate decline in particulate matter (PM₁₀) emissions (Requia et al., 2017). Values assigned to findings in each study were lower than 2.5. Only studies investigating the effect of HEVs on environmental pollution had an average score of 3 (Requia et al., 2017 p.69). Furthermore, some of the studies reviewed showed that fleet electrification could have a limited contribution to the reduction of non-exhaust emissions, driven by the rise in energy generation emissions. However, when electric vehicles are powered by clean sources of energy such as solar, wind, and water, particulate matter emissions reduce significantly. Soret et al. (2014, p.51) established that electricity generation emissions due to BEVs and PHEVs charging had a relevant effect on NO₂ levels in Madrid and Barcelona, Spain, where nuclear energy and renewable energy sources represent 21% and 33% of the regions power generation profile.

EVs have a more substantial impact in reducing gaseous emissions than in PM. The quantitative analysis conducted by Requia et al. (2017) suggested that the adoption of EVs could significantly reduce the emission of CO, VO, and NO₂. For instance, Ferrero et al. (2016) examined the impact of EVs on air pollution from a highway in Milan, Italy. The researchers reported that a replacement of 50 percent of non-electric cars with electric vehicles could translate into remarkable reductions in pollutant concentrations. The majority of studies link electric mobility with GHG emissions. Requia et al. (2017) report that electric vehicles are associated with significant Carbon IV Oxide emissions reductions. The underlying reason could be that the penetration of EVs is not more sensitive to variations in source of energy generation compared to gaseous and PM pollutants. Put in another way; existing literature shows that even when the electricity used to recharge EV batteries is generated from coal power plants that have high rates of air pollution, penetration of EVs could still lead to reductions in CO₂ emissions. China, a country where coal generation dominates the national electric grid, exemplifies this environmental benefit of EVs. In China, BEVs have the potential of reducing CO2 emission by 20 percent, although accompanied by increases in SO₂, NO_X, PM_2.5, and PM₁₀ by 370%, 120%, 250%, and 360%, respectively (Huo et al., 2013).

The adoption of EVs in Saudi Arabia has significant implications on the economy. One of the aspects that determine how the economy will perform in any country is power generation availability. According to the country's power generation regulation authority, the KSA electric power network is partitioned into 4 regions: the Southern, Central, Western, and Eastern regions (Almutairi, 2021). Recharging electric vehicles using mains electricity from the national grid certainly affects the peak load as well as the availability of energy for utilization in other activities that contribute to the KSA's national grid, including industrial processes.

Almutairi (2021) investigated how plug-in EVs impact power generation availability in the KSA. Various themes arose from the findings. Firstly, data of power capacity analyzed from the period between 2016 and 2020 show that generation margin did not exceed 7000 megawatts except in 2017. On the contrary, peak load in Saudi Arabia is projected to rise in the future with the increased adoption of electric vehicles. Besides, the current capacity margin in Saudi Arabia can only support an EV penetration of 20 percent (Almutairi, 2021). Higher levels of PEV penetration, such as 30% without a corresponding expansion of the capacity margin, could induce severe issues in the national power system. In worst-case scenarios, power outages could occur in the morning or the evening when peak load in residential areas coincides with that of battery power charging stations (Almutairi, 2021). Power outages imply negative consequences on the economy.

Chen et al. (2021) reported that the adoption of BEVs in the United States is likely to lead to an increased Gross Domestic Product and gross output of the national economy by $0.377 billion and $0.464 billion, respectively. Benefits to the economy would be higher following vehicle price reductions. Malmgrem (2016) provided the economic benefits of adopting electric vehicles, both at the individual and national levels. For example, annual fuel savings from a Honda Civic and Nissan Leaf are estimated to be approximately $688 (Malgrem, 2016). The residential electricity bill for an EV operator will rise by $275 per year due to EV charging. Malgrem (2016) highlights that the difference between fuel savings and the increase in charging costs implies that an EV will save $413 each year. Such savings are significant in the long-term such as ten or twenty years (Malgrem, 2016). Besides, EVs have lower maintenance costs since they have fewer parts than conventional vehicles (CVs). In EVs, electronics, motor, and battery responsible for the final drive do not require routine maintenance.

Various studies have investigated the economic impact of the EV industry on economic development. Similar to other changes, the transition of the transportation sector from fuel-powered vehicles to EVs has both losers and winners. Firstly, widespread EV penetration can cause a significant job loss in the oil industry, particularly in countries in the Gulf region such as the KSA, where oil is the primary driver of the economy. However, a substantial number of jobs are created in the EV equipment supply and maintenance sectors. For example, the California Electric Transportation Coalition (2012) conducted a study whose findings showed that every dollar from fuel savings generated 16 jobs besides being used to pay for goods and services. However, there is a paucity of research on per-vehicle analysis on the impact of EV adoption on the economy. This research paper seeks to examine the impact of electric vehicles on the environment and economy in the KSA.

Methodology

A systematic search was conducted in various databases, including PubMed, Google Scholar, Web of Science, and Science Direct. Also, due to the limited number of peer-reviewed articles reporting on the impact of EVs on the environment and economy in the KSA, article search was extended to scholarly sources, including official reports from research organizations and dissertations. The limited literature could be as a result of the late and slow adoption of electric vehicles in the kingdom. Keywords used in the article search included “electric vehicles,” “air pollution,” “impact on the environment,” “impact on the economy,” “economic benefits,” “Saudi Arabia,” “greenhouse gases,” “air quality,” and “the Kingdom of Saudi Arabia.” The period to which the articles were published was not restricted. However, the language of publishing was restricted to English.

For inclusion, articles had to report quantitative results on the economic or environmental impacts associated with the penetration of electric vehicles in Saudi Arabia. Studies were excluded if they only presented the economic or pollution effects associated with conventional vehicles or energy generation, had a descriptive research design, reported qualitative data, and health benefits related to air pollution were excluded from the analysis. Also, published editorials, commentaries, and duplicate publications were part of the exclusion criteria. There were no restrictions on the type of electric vehicle studied. Abstracts and titles of articles that fulfilled the inclusion criteria were screened for relevancy. A full-text review was then performed on the resulting articles for eligibility.

Figure 1. The systematic screening process for studies

Desk research or secondary research was used as the research methodology. In a world where technological advances have led to vast data amounts being gathered and archived by scholars worldwide, utilization of existing data in research has become common. Secondary research involves utilizing information from another person’s primary research to inform the current research problem or question. In this research paper, desk research was selected as the appropriate methodology due to limitations in resources and time. The major benefits of desk research are its convenience and cost-effectiveness (Pérez-Sindín, 2017). Since another person has already gathered the data, a researcher is not forced to devote time and financial resources to its collection. When quality secondary research is available, researchers have access to larger datasets, particularly those from agencies or funded studies that contain larger samples and substantial breadth. Larger sample size means that a study sufficiently represents the target aspect or population, increasing a study’s generalizability and validity.

In developing this research paper, using secondary sources is critical in accelerating the research pace since the most time-consuming phases of typical research projects, including data gathering, are eliminated. Such a benefit is particularly important if research aims at answering a time-sensitive question related to policy development (Pérez-Sindín, 2017). A major concern for the selected methodology could be the absence of the researcher during data collection and subsequent analysis, which could affect the credibility of generated findings. However, this issue is resolved by evaluating articles after a systematic search through predefined inclusion and exclusion criteria. Articles were assessed to ensure they match the problem or question under investigation.

Results

Article search on reputable databases shows that there is limited research on the impact of electric vehicles in Saudi Arabia. Of the 16 articles and reports identified in the initial search, only three met the inclusion criteria for review. Information extracted from these articles only projected the potential impact of EVs on the environment and economy in the KSA. None of the articles that met the inclusion criteria reports quantitative data on the actual effects of EVs in the country. Results from the three articles used for analysis were organized into two themes and subthemes.

Table 1. Themes arising from the analysis of research articles.

Impact on the Environment

Sub-theme 1: Emissions

Emissions from electricity generation associated with EV adoption represent one aspect that can quantify the effects of EV automobile technology in Saudi Arabia. At medium levels of EV deployment, in this case, 50000 vehicles with a low increment load and presuming peak charging, such a level of EV penetration will translate into the emission of 56976 tons of Carbon IV Oxide in comparison with the base (Elshurafa and Peerbocus, 2020). The base scenario represents a situation where no electric vehicles have been deployed in the KSA. Table 2 represents the load increment ad corresponding incremental CO₂ emissions according to three deployment scenarios: low, moderate, and high.

Table. 2. Load increment and corresponding incremental CO₂ emissions according to three deployment scenarios: low, moderate, and high (Elshurafa and Peerbocus, 2020).

As observed in Table 2, the incremental CO₂ emissions are highest during the off-peak case and lowest during the random case. Table 2 summarizes the additional CO₂ emissions that result from the deployment of electric vehicles in Saudi Arabia. However, to assess the net impact, quantification of the avoided emissions is necessary. The European Union Energy Portal provides that smaller CVs emit about 0.1kg/km of Carbon IV Oxide. Emission from larger SUVs is around 0.4kg/km or higher (Elshurafa and Peerbocus, 2020). Since battery charging time did not substantially affect additional CO₂ emissions, the scenarios representing the impact of EV on the environment in the KSA can be narrowed to 6. The scenarios represent worst and best-case scenarios in relation to CO₂ emission (Elshurafa and Peerbocus, 2020).

Table 3. Best- and worst-case scenarios of change in CO₂ emissions in the KSA. Source: (Elshurafa and Peerbocus, 2020).

The best-worst case scenarios are not likely to happen since they represent extreme levels. However, the median net change in CO₂ emissions, which is more realistic, can be observed in Table 3, and shows that a net increment in CO₂ emissions associated with EVs in the KSA would only rise in the worst-case scenarios (Elshurafa and Peerbocus, 2020). In the rest of the scenarios, EVs reduce the level of CO₂ emissions. Such an impact represents that penetration of EVs in Saudi Arabia positively impacts the environment.

Impact on the economy

Sub-theme 1: Costs

The net revenue arising from additional units sold to EV operators can quantify the impact of electric vehicles in Saudi Arabia. Table 4. shows the impact of EVs on the KSA grid revenues.

Table 4. Impact of EVs on the KSA grid revenues. Source: (Elshurafa and Peerbocus, 2020).

From Table 4, one can observe that penetration of EVs in the KSA would always result in increased net revenues for the national grid. Such an impact is significant given the low fuel prices in the KSA.

Subtheme 2: Fuel Cost Comparison Between an EV and a CV in the KSA Roads

Comparing two cars, one an EV and the other a conventional vehicle, can inform the cost-effectiveness of EVs in Saudi Arabia based on the current cost of fuel and electricity in the country. Results from the comparison of the cost-effectiveness of the 2015 Ford Focus EV and the 2015 Ford Focus in the KSA are summarized in table 5.

Table 5: Cost-effectiveness of an EV compared to a CV based on the current electricity and fuel costs in the KSA (Deloitte, 2015).

Data in Table 5 shows that the annual electricity cost for Ford Focus EV and Focus gasoline based on energy costs in the KSA is $210 and $351, respectively. Also, it can be observed from Table 5 that the annual operational cost of Ford Focus EV in Saudi Arabia is $ 3069. On the other hand, the cost is $3745.

GDP

Assuming that the KSA develops a solar industry to power the EVs, the country’s GDP is expected to increase GDP from saving gasoline shows an increase of $104.6 billion, $69.5 billion, and $53.3 billion by 2030 for the high price, medium price, and low-price scenarios.

Discussion

The purpose of the research was to establish the impact of EVs on the environment and economy in Saudi Arabia. Results show that incremental CO₂ emissions in the KSA are highest during the off-peak period and highest in the random charging periods. The results could be explained by the role played by regional generators in each of the four regions of the KSA electricity network. Liquid fuels virtually meet the energy needs of the residents. Therefore, the time of EV battery charging has an insignificant impact on carbon emission. The marginal generator in the eastern region is gas-fired. Also, in the central region, liquids supply 30 percent of the needed energy. During peak times, the extra energy required for utilization in the central zone is met from power plants powered by gas or transmission power lines connecting the central and eastern regions. Thus, a peak charging situation, that is, the marginal energy being met through gas-fired plants, would lead to the central region's lower carbon emissions compared to when EV battery charging is at off-peak times.

Besides, it can be observed from Table 2 that the difference in marginal generator emission between the off-peak and peak battery charging scenarios is small. The underlying reason for these findings involves various factors, including the KSA energy mix and the assumed level of EV penetration. 50 percentage of residents in the KSA reside in the central and eastern regions, while the rest live in the southern and western regions, which are liquid-powered. Therefore, 50 percent of EVs in Saudi Arabia are powered by gas, while the other 50 percent is powered by fuels. Thus, EVs would only have a negative impact on the environment in the KSA if most of the vehicles are in the central region where marginal generator emission is high due to gas-powered generators.

Table 3 shows a positive impact of EVs on environment in Saudi Arabia. Net increase in carbon emission only occurs in the worst-case scenarios where the retired CVs is large SUVs. Such scenarios are unlikely assuming the replacement of CVs by EVs likely follows a normal distribution due to the randomness of the process. Overall, results suggest a positive effect of EVs in reducing carbon emission in the KSA (Elshurafa and Peerbocus, 2020). Thus, EVs have a positive impact on environment in Saudi Arabia. Furthermore, results summarized in Table 5 illustrate the positive impact of EVs on the KSA economy.

Although there are other factors associated with EVs that influence economic development, including employment, equipment supplies and maintenance of the vehicles, data on these parameters is limited and hence could not be obtained for analysis (Elshurafa and Peerbocus, 2020). However, assuming the impact of EVs on Saudi Arabia’s net revenue from the grid mirrors that of other areas, the economy of the KSA significantly benefits from EV penetration is the country. Data shows that the increased penetration of EVs in the country leads to an increased grid net revenue, thus a positive effect on the environment. Besides, GDP growth is significant when EVs are charged by solar energy. Such a scenario also implies a substantial protection of the environment as the generation of solar energy eliminates carbon emissions.

Recommendations

Firstly, there is limited research on primary research reporting on the effect of EVs on the environment and economy in the KSA. Thus, future research can involve investigating whether the penetration of EVs in the kingdom has reduced pollution or improved the economy and to what extent. Such studies could examine the carbon emissions resulting from EV penetration in the country compared to the emissions avoided due to the adoption of these automobiles by Saudi Arabians. Results from this research show that EVs have the potential to positively impact the economy and the environment in the country. Thus, it would be advisable the government implement strategies that address the barriers to the acquisition of EVs. Government policies and incentives have a key role in managing the economy. Across the world, public transport is one of the most prominent sources of air pollution. Thus, incentives and policies should particularly target improving the electrification of the mass transit fleet in the country’s major cities, including Riyadh and Jeddah.

This research provides three policy suggestions that can be used by the KSA government to accelerate the level at which EVs in the country impact the environment. Firstly, gas prices in Saudi Arabia are significantly low due to the government-provided subsidies that cost nearly $42 billion annually. Low fuel costs incentivize individuals into driving gasoline or diesel-powered vehicles even if they do not have the need to drive. Increasing the price of gas will not only reduce the cost of subsidies but also disincentivize individuals from purchasing conventional vehicles while encouraging the adoption of EVs. Sindi et al. (2021) reported that inadequate charging stations is one of the factors slowing down the adoption of EVs in the KSA. The government can respond to this challenge by requiring establishments that offer parking to cars such as shopping malls to set up EV battery charging facilities. Besides, expanding the renewable energy infrastructure for charging ng EVs would significantly contribute to the reduction of gas emissions by the transportation sector. Also, more subsidies and tax incentives can be offered to importers of EVs or EV manufactures that intend to establish production infrastructure in the country such as Lucid Motors.

Conclusion

In conclusion, road transport is one of the main causes of air pollution in the KSA. The number of fuel dependent automobiles in the KSA has been increasing over the years. This research paper reveals an opportunity for electric vehicles to reduce the impact of road transport on pollution levels without negatively impacting citizens’ living standards while positively impacting the economy. The KSA government is committed to reducing the impact of automobiles on the environment through increased adoption of EVs in the country. Findings from this research show that EVs not only positively affect the environment but also lead to economic development. Quantitative data from secondary sources suggest that a remarkable replacement of conventional SUVs by EVs in the KSA reduces net carbon emissions by significant levels.

Also, the penetration of EVs in the KSA would always result into increased net revenues for the national grid. Such an impact is significant given the low fuel prices in the KSA. To benefit from the positive impact that EVs have on the environment and the economy, the KSA government should implement policies that seek to accelerate the adoption of the new technology. The government can consider eliminating barrier for EV adoption in Saudi Arabia by reducing subsidies to diesel and gasoline. Increasing the price of diesel and gasoline will reduce the cost of subsidies and disincentivize individuals from purchasing gasoline-powered vehicles while encouraging the adoption of EVs. Lowering the price of EVs and expanding the number of charging stations in the KSA could improve purchase of EVs by consumers.

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