Middle East Battery Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Middle East Battery Market Trends and Insights

EV Adoption Push Under National Vision Agendas

Saudi Arabia’s 2026 decision to nurture an electric-vehicle manufacturing sector is reshaping regional battery demand. Vision 2030 targets 30% electric-vehicle penetration in Riyadh by 2030, backed by an order to install 5,000 public chargers, and all new government fleet cars ordered after 2027 must be zero emission.^{[1]Saudi Energy Ministry, “Vision 2030 Electric Vehicle Targets,” energy.gov.sa} Qatar’s plan for 2,000 charging points by 2030 adds a secondary demand node. Lucid Motors began vehicle assembly in 2024 and signals local capability expansion. Actual electric-vehicle registrations were below 5,000 units in 2025, which indicates that incentives and consumer engagement must accelerate. Diverse charging standards across the Gulf fragment supplier strategies.

Utility-Scale Renewables Driving ESS Demand

Solar curtailment has already reached 1.2 TWh in Saudi Arabia during 2025, or 8% of total renewable output, and similar patterns are emerging in the UAE.^{[2]Saudi Power Procurement Company, “Battery Energy Storage System Tenders,” sppc.com.sa} Battery energy storage systems are the preferred remedy, typified by Saudi Arabia’s 8 GWh phase-one tender awarded in 2025 and the UAE’s 19 GWh CATL–Masdar project that will supply 1 GW of round-the-clock power by 2027.^{[3]Reuters Staff, “CATL, Masdar Partner on USD 6 Billion UAE Battery Storage Project,” reuters.com} Oman’s 100 MWh Ibri III storage plant shows that smaller states are embedding batteries at procurement launch. IRENA estimates that every new gigawatt of intermittent renewable capacity now requires 0.3-0.5 GWh of batteries to preserve grid stability.

Incentives for Local Battery Manufacturing

Saudi Arabia’s IKTVA rule mandating 30-50% in-kingdom value addition for awarded renewable and storage contracts, and the UAE’s “Make it in the Emirates” incentives, have brought cell makers to set up assembly lines. NEOM has earmarked USD 8.4 billion for hydrogen infrastructure that includes large batteries, creating further pull for local manufacturing. Tdafoq and Delectrik Power Systems agreed in 2025 to establish a flow-battery plant, exemplifying the shift from imports to joint ventures.

Expanding Telecom & Data-Center Backup Demand

The UAE hosts more than 50 active data centers in 2026, together exceeding 600 MW of IT load; each site relies on batteries for uninterruptible power supply. Saft’s lithium-ion rollout for Saudi telecom towers cut diesel use by 92% and truck rolls by 70%. EnerSys expanded a regional distribution network for PowerSafe batteries in 2024. Tesla’s Megapack has been adopted at off-grid sites where grid outages threaten connectivity. ITU guidelines standardize battery performance, so suppliers must guarantee sufficient cycle life under desert temperatures.

Raw-Material Price Volatility

Lithium carbonate prices fluctuated between USD 12,000 and USD 18,000 per ton in 2025, unsettling budgetary planning for assemblers working on fixed-price contracts. With zero domestic lithium, cobalt, or nickel, every Middle East battery plant depends on imports. Cobalt supply disruptions in the Democratic Republic of Congo drove a 35% spot-price rise in early 2025, pushing suppliers toward cobalt-reduced chemistries. Saudi Arabia’s Public Investment Fund has acquired minority stakes in Australian and Chilean lithium ventures to hedge the exposure, yet end-product pricing inside the Middle East battery market still tracks global spot swings.

Limited Indigenous Mineral Supply

Regional geological surveys confirm negligible reserves of lithium, cobalt, or nickel, so refinery investment cannot offset upstream scarcity. The UAE signed a nickel hydroxide sourcing memorandum with Indonesia in 2025, but the material must still transit through third-party refiners. Recycling is immature: Dubatt’s 25,000 tpa lead-acid plant recovers only lead and cannot yet process lithium-ion scrap. Until closed-loop capacity scales are achieved, mineral dependence will restrain localized cost control.

Segment Analysis

By Battery Type: Rechargeables Dominate Fleet and Grid Segments

Secondary batteries led revenue with 70.3% in 2025, and the segment is projected to advance at a 10.8% CAGR through 2031. The figure reflects the rising share of electric vehicles, data-center backups, and grid-scale energy storage systems that demand thousands of deep cycles. The primary battery niche stays relevant in low-drain instrumentation and defense electronics but faces policy and cost headwinds as recycling mandates tighten.

Rechargeable uptake hinges on the total cost of ownership. BYD’s 6,000-cycle lithium iron phosphate pack for Saudi Electricity Company exemplifies economics that trump lower upfront prices of single-use chemistries.^{[4]BYD Company, “Saudi Arabia Battery Energy Storage Contracts,” byd.com} Primary batteries supply under 30% of regional revenue, mainly in oilfield sensors where replacement intervals align with scheduled maintenance trips. Expanded enforcement of IEC 61960 standards in the UAE further cements safety requirements that favor reputable secondary suppliers.

Note: Segment shares of all individual segments available upon report purchase

By Technology: Solid-State Pilots Challenge Lead-Acid Incumbency

Lead-acid held 39.8% revenue in 2025, protected by cost leadership, robust recycling, and entrenched use in starter-lighting-ignition systems. Solid-state batteries, though still below 2% revenue, carry the highest 30.9% CAGR to 2031 as pilot lines migrate toward commercial runs in premium electric vehicles and high-reliability grid nodes.

Lithium-ion chemistries comprised around 45% in 2025 and retained the default status for utility-scale storage. Flow batteries have broken into industrial slots after Aramco’s iron-vanadium unit demonstrated high-temperature tolerance. Enpower Greentech’s relocation under the UAE NextGenFDI program shows Gulf policymakers are courting solid-state pioneers with R&D incentives. Lead-acid prices remain 60-70% below lithium-ion on a per-kilowatt-hour basis but carry shorter cycle life, which narrows the advantage in long-run calculations.

By Application: Automotive Batteries Outpace Industrial and Portable Segments

Automotive batteries held a 33.5% share in 2025 and are expected to grow at a 9.5% CAGR through 2031, reflecting aggressive domestic-manufacturing targets in Saudi Arabia and new charging corridors in the UAE. Industrial stationary storage, particularly utility-scale energy storage systems, emerged as the fastest-growing subset inside industrial applications, underpinned by multi-gigawatt tenders meant to reduce solar curtailment.

Automotive demand is being institutionalized. Saudi government fleets shift to zero-emission models from 2027, creating a guaranteed procurement channel. Lucid’s plant secured in-kingdom assembly lines and will add cell assembly by 2027 to comply with IKTVA requirements. Forklifts and automated guided vehicles in Gulf warehouses migrate from lead-acid to lithium-ion to support continuous multi-shift duty cycles. Portable batteries are mature and tied to consumer electronics replacement cycles, which are lengthening and thus producing modest growth.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Saudi Arabia generated 41.9% of the Middle East battery market revenue in 2025. The two-phase 18 GWh storage tender and a 15.1 GWh BYD project pipeline define the most assertive grid-modernization drive. Upstream electrification and NEOM’s hydrogen plans add industrial and long-duration niches. Domestic value-addition rules force suppliers into joint ventures, anchoring manufacturing footprints that should deepen over the forecast frame.

The United Arab Emirates contributed roughly 28% revenue in 2025. The USD 6 billion CATL–Masdar 19 GWh storage complex illustrates the scale of solar-plus-storage programs. Data-center construction in Abu Dhabi and Dubai sustains telecom-grade lithium-ion shipments. The UAE recycling ecosystem, headed by Dubatt, is the first to tackle circularity but lacks lithium-ion processing scale.

Oman is on track for the fastest 14.7% CAGR to 2031, steered by Vision 2040 mandates and green-hydrogen export strategies. The 100 MWh Ibri III storage unit pioneers integrated solar-plus-storage procurement. Qatar targets 4 GW renewable capacity by 2030 and hosts an emerging 1.675 GW solar-plus-storage pipeline. Kuwait’s Al Dibdibah project and Bahrain’s modest Noor 1 solar farm indicate earlier-stage renewable integration but create distributed opportunities for commercial storage systems.

Note: Segment shares of all individual segments available upon report purchase