Saudi Arabia Automotive Powertrain Market Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025–2030

Saudi Arabia Automotive Powertrain Market Overview

• The Saudi Arabia Automotive Powertrain Market is valued at USD 6.5 billion, based on a five-year historical analysis. This growth is primarily driven by the increasing demand for fuel-efficient vehicles, rapid advancements in automotive technology, and a marked shift towards electric and hybrid powertrains. The market is also supported by substantial government initiatives, including Vision 2030, which aims to diversify the economy and promote sustainable transportation solutions through incentives for electric vehicle adoption and local manufacturing investments .
• Key cities such as Riyadh, Jeddah, and Dammam dominate the market due to their significant population density, robust economic activities, and advanced infrastructure development. These urban centers are experiencing a surge in vehicle ownership and a growing preference for advanced powertrain technologies, positioning them as pivotal hubs in shaping the automotive landscape in Saudi Arabia .
• The Technical Regulation for Light Vehicles Fuel Economy (Corporate Average Fuel Economy, CAFE), issued by the Saudi Standards, Metrology and Quality Organization (SASO) in 2023, mandates that all new vehicles sold in the country must meet specific emissions and fuel economy standards. This regulation aims to reduce air pollution and promote the adoption of cleaner technologies, thereby encouraging manufacturers to invest in electric and hybrid powertrains. The regulation covers compliance thresholds for CO? emissions and fuel efficiency, with periodic reporting and certification requirements for importers and manufacturers .

Saudi Arabia Automotive Powertrain Market Segmentation

By Type:The market is segmented into various types of powertrains, including Internal Combustion Engines, Electric Powertrains, Hybrid Powertrains, Fuel Cell Powertrains, and Others. Each type addresses different consumer preferences and regulatory requirements. Electric and hybrid powertrains are gaining significant traction, driven by environmental concerns, government incentives, and the introduction of new models by both local and international manufacturers .

By End-User:The market is further segmented by end-users, including Passenger Vehicles, Commercial Vehicles, Fleet Operators, Government Agencies, and Others. Demand from passenger vehicles remains dominant, supported by rising disposable incomes, increased female participation in driving, and evolving consumer preferences towards more efficient and environmentally friendly options .

Saudi Arabia Automotive Powertrain Market Competitive Landscape

The Saudi Arabia Automotive Powertrain Market is characterized by a dynamic mix of regional and international players. Leading participants such as Toyota Motor Corporation, Nissan Motor Co., Ltd., General Motors Company, Ford Motor Company, Hyundai Motor Company, BMW AG, Mercedes-Benz Group AG, Volkswagen AG, Honda Motor Co., Ltd., Kia Corporation, Mitsubishi Motors Corporation, Tata Motors Limited, BYD Company Limited, Changan Automobile, Geely Automobile Holdings Limited, Lucid Motors, Ceer Motors, Al-Futtaim Automotive, Abdul Latif Jameel Motors, and Saudi Automotive Manufacturing Company (SAMCO) contribute to innovation, geographic expansion, and service delivery in this space.

Saudi Arabia Automotive Powertrain Market Industry Analysis

Growth Drivers

• Increasing Demand for Fuel-Efficient Vehicles:The Saudi automotive market is witnessing a significant shift towards fuel-efficient vehicles, driven by rising fuel prices and consumer preferences. In future, the average fuel price in Saudi Arabia is projected to reach 2.50 SAR per liter, prompting consumers to seek vehicles that offer better mileage. Additionally, the government aims to reduce fuel consumption by 20% by 2030, further boosting the demand for fuel-efficient powertrains, which are expected to account for 40% of new vehicle sales in future.
• Government Initiatives Promoting Electric Vehicles:The Saudi government has set ambitious targets for electric vehicle (EV) adoption, aiming for 30% of all vehicles to be electric by 2030. This initiative is supported by a $1.5 billion investment in EV infrastructure, including charging stations and incentives for consumers. In future, the number of EV charging stations is expected to increase to 1,000, facilitating the growth of the EV market and encouraging manufacturers to invest in electric powertrain technologies.
• Rising Consumer Awareness about Environmental Sustainability:As global awareness of climate change increases, Saudi consumers are becoming more environmentally conscious. In future, surveys indicate that 65% of consumers prioritize sustainability when purchasing vehicles. This shift is driving demand for hybrid and electric powertrains, as consumers seek to reduce their carbon footprint. The government’s commitment to sustainability, including a target to reduce greenhouse gas emissions by 30% by 2030, further supports this trend, creating a favorable environment for eco-friendly automotive technologies.

Market Challenges

• High Initial Investment Costs for New Technologies:The transition to advanced powertrain technologies, such as electric and hybrid systems, requires substantial capital investment. In future, the average cost of developing a new electric vehicle powertrain is estimated at $1.2 million, which poses a significant barrier for local manufacturers. This high initial cost can deter investment in innovative technologies, limiting the growth potential of the automotive powertrain market in Saudi Arabia.
• Limited Availability of Skilled Workforce:The automotive sector in Saudi Arabia faces a shortage of skilled labor, particularly in advanced manufacturing and engineering roles. In future, it is estimated that only 20% of the workforce possesses the necessary skills for electric vehicle production. This skills gap hampers the ability of manufacturers to adopt new technologies and meet the growing demand for advanced powertrains, ultimately affecting the competitiveness of the local automotive industry.

Saudi Arabia Automotive Powertrain Market Future Outlook

The future of the Saudi automotive powertrain market is poised for transformation, driven by technological advancements and regulatory support. As the government continues to invest in EV infrastructure and promote sustainable practices, the market is expected to see a significant increase in electric and hybrid vehicle adoption. Additionally, partnerships with technology providers will enhance innovation, enabling local manufacturers to develop competitive powertrain solutions. The focus on reducing emissions and improving fuel efficiency will further shape the market landscape, fostering a more sustainable automotive ecosystem.

Market Opportunities

• Growth in Electric Vehicle Infrastructure:The expansion of electric vehicle infrastructure presents a significant opportunity for manufacturers. With the government planning to install 1,000 charging stations in future, this will facilitate the adoption of electric vehicles, creating a robust market for electric powertrains and related technologies.
• Partnerships with Technology Providers:Collaborating with technology firms can enhance innovation in powertrain development. In future, partnerships with tech companies specializing in battery technology and software solutions can lead to the creation of more efficient and advanced powertrains, positioning local manufacturers competitively in the market.