Why the electric freight and sustainable shipping sector is turning to the Middle East

Countries such as the UAE are turning to autonomous vehicles to support their climate goals

Einride and the UAE Ministry of Energy and Infrastructure signed an initial pact last year to establish a freight mobility grid. Photo: Einride

Sustainable shipping and autonomous electric freight technology has been underestimated in terms of the impact it can make on reducing climate emissions, but the scope for the industry is booming in the Middle East, according to industry executives.

The growth of the sector in the Middle East will also enable other regions to see the potential for success and implementation on a larger scale, according to Robert Falck, chief executive of Einride, a Sweden-based freight mobility company.

“We’re super excited to be here with all the great ambition and cool projects,” he said on the sidelines of the World Economic Forum’s special meeting in Riyadh.

“I think that autonomous [freight shipping] will probably be scaled in volume first here in the Middle East,” he added.

While Einride doesn’t yet have any vehicles, smart grids or clients in Saudi Arabia, the company has a strong presence in the UAE.

Last year, it signed a preliminary agreement with the UAE's Ministry of Energy and Infrastructure to establish a 550km freight ‘Falcon Rise’ mobility grid, with the eventual aim of enabling the use of electric and autonomous vehicles.

The Falcon Rise grid will implement Einride’s “full freight mobility offering” across Abu Dhabi, Dubai and Sharjah, covering 2,000 electric lorries, 200 autonomous lorries and eight charging stations with more than 500 charging points, the company said last year.

Mr Falck confirmed that the company was progressing with the project.

“We’re going to announce our first big clients that will make this system real,” he said during an interview with The National’s Business Extra podcast recorded in Riyadh.

The UAE, and the Middle East overall, have shown an interesting mix of intangible factors that could lead to success for those in the electric freight sector, Mr Falck said.

“There's a lot of high ambition … and it's a melting pot of knowledge and ideas about the future.”

Globally, the value of the global autonomous vehicle market is forecast to reach about $2.3 trillion by 2032, from about $121.78 billion in 2022, the latest data from Precedence Research shows.

Meanwhile, fully autonomous robotaxis are expected to become commercially available at a large scale by 2030, and fully autonomous trucking is expected to reach viability between 2028 and 2031, McKinsey's latest survey released this year found.

Investments of more than $4 billion are needed for full-journey autonomous lorries, it added.

Countries such as the UAE and Saudi Arabia are aiming to have wide-scale deployment of autonomous transport to support their sustainability agendas and transform urban planning.

In July last year, the UAE Cabinet has approved the first preliminary national licence for self-driving cars, granting it to Chinese company WeRide.

Meanwhile, Saudi Arabia aims for 15 per cent of its public transport vehicles to be autonomous by 2030, according to officials.

For Einride, one of its touted products is the Autonomous Gen 2, a cabless, electric and autonomous freight vehicle.

“We were the first in the world to get a permit to operate on a public road in Sweden in 2019, we’ve been doing that for five years now,” he said.

“We now have permits to operate in Sweden, Europe and the US,” he added, also talking about plans for the UAE.

“We have vehicles in the UAE already and we’ve shown them at exhibitions,” he said. “We’ll start to go live with operations starting this summer.”

The company also offers Einride Saga, what it describes as an “intelligent freight operating system” that uses data and artificial intelligence to potentially increase the efficiency of the entire ecosystem.

“For us it’s not just selling a truck, it’s providing an entire system,” he said.

Speaking at a panel at the WEF meeting in Riyadh, Mr Falck said both electric and diesel vehicles would play a role in the years ahead.

“The coexistence is something we need to continue to develop,” he said.

“We need to see more advanced biodiesels developed, and we need to see electric taking more and more of the percentage of mobility.”

While companies like Tesla and consumer-orientated vehicles have a majority of the media spotlight, Mr Falck said sustainable shipping companies like Einride, which provide digital, electric and autonomous technology solutions, don’t necessarily mind flying under the radar.

“We’ve become the biggest electrifier of heavy duty freight transport in the world today,” he said.

The company's clients include PepsiCo, Heineken, Mars, Maersk and GE Appliances, among others.

Also in attendance at WEF's special meeting in Riyadh was Essa al-Saleh, chief executive of Volta, another commercial electric lorry manufacturer.

“We're looking to expand our business beyond Europe, so the GCC presents a unique opportunity from both a capital perspective and from an opportunity to build assembly plants and a supply base to support that growth,” he said.

“It's a potential market, there's a lot of interest here from stakeholders in this region,” he added.

Volta was founded in Sweden in 2019 but briefly filed for bankruptcy protection in October last year after one of its battery suppliers went bankrupt.

The company recently relaunched as Volta Commercial Vehicles Limited and registered in the UK.

According to Mr Al-Saleh, the company plans to ship its first vehicles in Germany, France, UK and Scandinavia by the end of 2024.

Commercial vehicles are approximately 10 years behind where passenger vehicles are in terms of electrification, but perceptions within the freight industry are quickly changing, he said.

“The scepticism in the marketplace around EVs is going away and it's more accepted, but now it's a matter of addressing the 'how' aspect … the reference point isn't how much diesel you are going to spend, it's how much energy you're going to consume,” he added.