Investing in clean energy are electric cars the future?

As the cornerstone of the Vision 2030 reform plans, Aramco’s IPO, the largest in initial public offering history, is going ahead with its announced timeline while investors are turning their eyes on the official confirmation of the offering’s size and price. As a highly welcomed generous gesture, the government is offering incentives to national investors. Another cornerstone of the vision is investing in renewable and clean energy and its related by-products such as electric cars.

As for electric cars, experts expect that by the year 2025, they will become cheaper than their internal combustion engine counterparts, mostly due to the rapid fall in the price of batteries. By 2030, 30 million electric cars will be sold, accounting for 28 percent of new sales. For the past 4 years, almost every major car manufacturer has started developing its prototype of electric cars. Also, new brands are evolving and making headlines almost on quarterly basis attracting global investors, including the Public Investment Fund (PIF).

Last year, the PIF invested in Lucid Motors, adding to the emerging competition facing US electric carmaker Tesla. By investing in the electric vehicles market, the PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development. These investments are also part of the government’s plan to build an environment-friendly economy and to diversify the Kingdom’s GDP away from reliance on oil.

As part of its plans to prepare the roads for electric cars, the Kingdom installed its first-ever commercial electric car charging station in Riyadh earlier this week.

The new charging station is located near the city’s airport road, at a branch of one of the largest local chains of petrol stations.

One of the benefits of Future Investment Initiatives (FII) is the networking with potential partners and companies who share the same vision with that of the country. Shortly, I will be on my way to Stuttgart to visit the industrial facilities of one of these companies I met at FII. I will discuss with their management the plans for a possible investment in Saudi Arabia to manufacture low-cost electric cars to be used in main cities and new cities such as Qiddiya and Neom. This company was one of FII’s partners and managed to amuse participants with their electric cars running around the conference venue. The company has also been doing major metal and aluminum work for Makkah’s Grand Mosque since 2014.

Saudi Arabia will be supporting and enabling the renewable and clean energy sector and will invite local and international investors to take advantage of this promising future trend.

Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.