KSA Battery Manufacturing Market Outlook to 2030

KSA Battery Manufacturing Market Overview 

• The KSA battery manufacturing market has experienced substantial growth over recent years due to a combination of factors including rising demand for energy storage solutions, and updates in battery technology. In 2018, the global market size was estimated at UDS500 million and By 2023, it grew to USD1.2 billion, reflecting a Compound Annual Growth Rate (CAGR) of 19.1%.
• The KSA battery manufacturing market is dominated by several key players, including Saudi Aramco, Middle East Battery Company (MEBCO), Al-Jomaih and Shell Lubricating Oil, Company USD(JOSLOC), and Zahid Group. These companies dominate the market due to their extensive supply chains, advanced production techniques, and strong distribution networks.
• In May 2023, Saudi Aramco announced a strategic partnership with the Korean battery manufacturer, LG Energy Solution, to establish a joint venture for manufacturing high-performance batteries in Saudi Arabia. This collaboration aims to produce advanced lithium-ion batteries, targeting both domestic and international markets.
• The West region holds a crucial role in battery manufacturing driven by the development of smart cities and renewable energy projects in cities like Jeddah and Makkah. The region's focus on sustainable development and energy efficiency initiatives plays a crucial role in the expansion of the battery manufacturing market​.

KSA Battery Manufacturing Market Segmentation

The KSA battery manufacturing market is segmented by product type, technology, and region.

By Product Type: The KSA battery manufacturing market is segmented by product type into automotive batteries, industrial batteries, and consumer electronics batteries. In 2023, automotive batteries hold the dominant market share, accounting for 45% of the market. This is due to the increasing adoption of electric vehicles and the government's focus on promoting sustainable transportation solutions.

By Technology: The market is also segmented by technology into lithium-ion batteries, lead-acid batteries, and nickel-metal hydride batteries. In 2023, lithium-ion batteries dominated the market, this dominance is driven by their superior energy density, longer lifespan, and widespread use in electric vehicles and renewable energy storage.

By Region: The KSA battery manufacturing market is segmented by region into North, South, East, and West. In 2023, the North region, including Riyadh dominated the market. The region's dominance is attributed to its well-established industrial infrastructure, significant government investments, and the presence of major manufacturing hubs.

KSA Battery Manufacturing Market Competitive Landscape 

• In 2024, Saudi Aramco and LG Energy Solution announced the establishment of a joint venture to manufacture advanced lithium-ion batteries in Saudi Arabia. The joint venture aims to produce 10 GWh of batteries annually by 2025, catering to both domestic and international markets.
• The Middle East Battery Company (MEBCO) is set to expand its production capacity by half in 2024. This expansion involves a $200 million investment to upgrade existing facilities and establish new production lines. The increased capacity will help meet the growing demand for automotive and industrial batteries in Saudi Arabia.

KSA Battery Manufacturing Market Analysis 

KSA Battery Manufacturing Market Growth Drivers: 

• Rising Demand for Electric Vehicles: The adoption of electric vehicles (EVs) in Saudi Arabia is a major growth driver for the battery manufacturing market. In 2024, the Saudi government aims to have 100,000 electric vehicles on the road as part of its Vision 2030 initiative. This surge in EV adoption is expected to increase the demand for automotive batteries.

• Expansion of Renewable Energy Projects: Saudi Arabia's commitment to expanding its renewable energy capacity is another key driver. In 2024, the country is set to add 3,000 MW of solar power and 1,200 MW of wind power to its energy mix. These projects will necessitate substantial energy storage solutions, driving demand for industrial batteries.

• Increasing Investment in R&D: Investment in research and development (R&D) is critical for the growth of the battery manufacturing market. In 2024, Saudi Arabia's total investment in battery R&D is projected to reach $150 million, focusing on developing advanced battery technologies and improving production efficiency.

KSA Battery Manufacturing Market Challenges: 

• High Production Costs: The high cost of battery production remains a challenge for manufacturers. In 2024, the average cost of producing a lithium-ion battery pack is estimated to be around $150 per kWh. This high cost is driven by expensive raw materials and advanced manufacturing processes.
• Environmental Concerns: The environmental impact of battery production and disposal is a growing concern. In 2024, it is estimated that over 50,000 metric tons of battery waste will be generated in Saudi Arabia. Proper recycling and disposal of batteries are crucial to mitigate environmental harm.

KSA Battery Manufacturing Market Government Initiatives: 

• National Renewable Energy Program (NREP): The NREP aims to significantly increase the share of renewable energy in Saudi Arabia's energy mix. In 2024, the program is set to launch new projects with a combined capacity of 4,200 MW. These projects will require substantial battery storage solutions, providing a significant boost to the battery manufacturing industry.
• Battery Recycling Programs: To address environmental concerns, the Saudi government is launching a national battery recycling program in 2024. This program aims to recycle at least 30,000 metric tons of battery waste annually. The government has allocated $100 million for the establishment of recycling facilities and awareness campaigns.

KSA Battery Manufacturing Market Outlook 

KSA Battery Manufacturing Market is expected to grow by 2028 along with a respectable CAGR from 2023 to 2028, driven by increasing technological advancements & expansion of online retail. 

Future Trends

• • Growth in Electric Vehicle Adoption: Over the next five years, the adoption of electric vehicles in Saudi Arabia is expected to grow exponentially. By 2028, the number of electric vehicles on the road is projected to reach 500,000, driven by government incentives and increasing consumer awareness. This growth will significantly boost the demand for automotive batteries, creating new opportunities for local manufacturers.
  • Expansion of Renewable Energy Capacity: Saudi Arabia plans to further expand its renewable energy capacity, with a target of 20,000 MW of solar and wind power by 2028. This expansion will require substantial battery storage solutions to ensure grid stability and energy reliability. The demand for industrial batteries is expected to increase, driving market growth.