Industry 5.0 coming to KSA?
Will Lucid build KSA's first Industry 5.0 plant?
Lucid Group's announcement that the Government of Saudi Arabia has agreed to purchase up to 100,000 of the company's electric vehicles (EVs) over a ten year period has become one of the biggest news stories of the week. The government made an initial commitment to purchase 50,000 vehicles, with an option to purchase a further 50,000 vehicles over the same period.Â
Given that Lucid only started production of Lucid Air EVs in September last year, delivering just 125 vehicles to customers by the end of 2021, a commitment for 100,000 international vehicle orders is a huge deal for the new company. However, taking into account the Saudi Public Investment Fund's $1 billion investment commitment to Lucid Group, enabling it to fast-track production plans, this is perhaps not too suprising!
Putting more EVs on the road, clearly fits in with Saudi Arabia's sustainability goals. Last year, the Kingdom pledged to reach net-zero by 2060 and now has a growing number of initiatives to promote clean energy, offset carbon emissions and protect the environment. An overhaul of urban mobility plans, with a focus on sustainable transport, is also underway.
For example, the government plans to ensure that 30% of all vehicles in the city of Riyadh will be electric by the year 2030. You'll also remember that the Ministry of Transport and Logistics Services signed an MoU with NAVYA Group last month, to support the French company in bringing electric driverless shuttle buses to the country's urban areas (see Middle East AI News 17-Mar-22). Obviously, the Lucid deal provides a high profile demonstration of the government's commitment to support sustainability goals.
Even more significantly, the agreement includes a commitment from Lucid to build an international manufacturing facility in the Kingdom, which has long been in the pipeline.
The government deal to purchase 100,000 vehicles, follows a series of agreements signed between Lucid Group and various Saudi government entities over the past few months. Agreements were signed with the Ministry of Investment of Saudi Arabia (MISA), the Saudi Industrial Development Fund (SIDF), and the Economic City at King Abdullah Economic City (KAEC). Lucid's future manufacturing plant will be built in #KAEC, on Saudi Arabia's western Red Sea coast.
Lucid's plans to manufacturer in Saudi Arabia will require building one of the world's most advanced production plants, equipped with cutting-edge industrial robotic automation.
Lucid set out to design an advanced manufacturing plant for Arizona that would blend advanced robotics with human craftmanship: two key principles of Industry 5.0. Equipment and systems were sourced for production lines from leading suppliers in Japan, Germany, Mexico, South Korea and the United States. With an initial production capacity of 34,000 electric vehicles per year, the plant has been planned to expand phase-by-phase to meet future demand, in order to ensure the most effective use of capital.
The future Saudi Arabia manufacturing plant will be built with international export markets in mind and - we can assume - will take into account key learnings from the company's new state-of-the-art $700 million manufacturing plant in Arizona. Therefore, Lucid's planned international production plant could well turn out to be the Kingdom's first large-scale Industry 5.0 production facility.
The future Saudi facility will ultimately be able to produce 150,000 vehicles per year and, according to Lucid, could result in up to $3.4 billion of value to the company over 15 years. Beginning with an assembly operation and moving into full-production later, the new facility is expected to create several thousand high-skilled jobs in Saudi Arabia, creating diverse job opportunities and supporting skills development in the Kingdom.
Find out more about this story:
Read the Lucid Group press release.
Read this week's Arab News story.
Watch the Arizona factory tour (video).
Read the European Commission's primer on Industry 5.0.