KSA Last Mile LEVs Market is growing and have huge potential due to its high penetration: Ken Research

1. The current Saudi framework for EVs is in its early stages and is yet to be developed into a comprehensive framework.

In Saudi Arabia, less than 0.5% of vehicles are used as PHEVs at the moment. However, commercial EV deployment is not taking place in the kingdom. Additionally, starting 2018, Saudi authorities have let their residents to import EVs for personal usage. The establishment of an incentive, such as cost-free charging stations, reduced vehicle registration, toll exemptions, and other benefits, has not yet occurred. Saudi Arabia’s EV infrastructure is still lagging behind since the government has not yet set up charging stations in public places.

2. Cost-effective, rising gas price, reduced noise pollution and better driving experience to provide multiple benefits in adoption of LEVs.

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The demand for EVs is expected to rise in the near future due to rising fuel prices, such as the price of gasoline in 2021. Electric vehicles also accelerate and decelerate smoothly and quickly because an electric engine produces rapid torque, which allows them to take off from stops quickly. Additionally, the low center of gravity of EVs enhances handling, reactivity, and ride comfort. Additionally, because they are significantly quieter, electric automobiles help to reduce noise pollution. Additionally, EVs cost more to buy than ICEs do. However, the operating costs of an ICE vehicle (which require gasoline and maintenance) are higher than those of an EV.

3. Lack of transparency, large cod-based transactions, optimization and reverse logistics are pain points in current last mile delivery ecosystem.

With the exception of E-Commerce and Food Delivery, relatively few express companies in Saudi Arabia offer GPS real-time tracking as a service to customers that require complete access to real-time monitoring of their deliveries. Furthermore, in Saudi Arabia, more than 60% of customers choose COD services. The cost of COD deliveries is thought to be twice as high as that of prepaid orders due to greater rates of returns and failed delivery. In addition, last-mile delivery failures in Saudi Arabia result in low customer satisfaction and lost revenue when returns and retries of E-Commerce goods cause delays and protracted wait times. Last but not least, vehicle routing is a challenging computation of available drivers and vehicles utilizing the quickest routes to deliver customer orders within the desired time periods. Missed deliveries or slipping SLAs as a result of a routing delay or ineffective routing method can negatively impact the customer experience.

4. LEVs adoption is expected to reach 10% in the LMD Fleet by 2027F in KSA Last Mile LEV Market

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Currently, LEVs do not promise a higher adoption potential attributed to both a high-cost disparity and a lack of vehicle. Small format EVs may gain momentum in the near future, given their lower fuel and maintenance costs. They are also less dependent on charging infrastructure, since their power requirements are lower, and they are more likely to come in models that allow battery swapping. Also, electric vehicles in food and grocery delivery sectors are expected to penetrate faster due to availability of hybrid models.

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