Saudi Arabia targets slice of global EV market
Saudi Arabia targets slice of global EV market
Saudi Arabia has established itself as a key player in the e-mobility space
2022 was the year that Saudi Arabia established itself as a key player in the e-mobility space, in particular taking aim at the global electric vehicle (EV) production industry.
The Kingdom captured the attention of the EV industry in April with an announcement that the government would buy up to 100,000 EVs from Lucid Group over a ten year period and support Lucid in building an international manufacturing facility. Although impressive, this wasn't a complete surprise to industry watchers, since the Public Investment Fund (PIF) had already committed to invest $1 billion in Lucid Group, enabling it to build a new plant in Arizona and fast-track production plans.
What came next was definitely an eyebrow raiser! A follow-up press statement in May revealed the full extent of funding for Lucid's Saudi operations. At a publicity event in Riyadh, the government announced a 15-year financing and incentives package of $3.4 billion for the manufacturer.
So, given that the construction of the EV company's Arizona plant had an estimated budget of $700 million, why such a huge finance package? The answer could be that, firstly this investment signaled that this was the government's first step to - not only establish Lucid as a Saudi manufacturer - but establish a whole new EV production sector, creating new economy jobs for Saudi workers. Secondly, the Lucid production plant in King Abdullah Economic City (KAEC) will scale up for export, selling EVs to countries across Europe, the Middle East and Africa (EMEA).
In the following days, Saudi Arabia’s Minister of Investment Khalid al-Falih disclosed that the government was already in 'advanced talks' with other electric vehicle (EV) makers about building assembly plants. He commented at the World Economic Forum in Davos, Switzerland that the Lucid production plant would be one of at least three EV plants to be built in the Kingdom. This part of Saudi's EV story ended in a cliffhanger! The minister gave no further details.
Then, in November, Saudi Arabia's Crown Prince Mohammad bin Salman bin Abdulaziz launched the first Saudi electric vehicle brand: Ceer. A joint-venture between the PIF and Foxconn, and incorporating a technology partnership with BMW, the new brand will also establish a production plant at KAEC and begin production by 2025.
Projected to contribute US$8 billion directly to Saudi Arabia’s GDP by 2034, Ceer will create up to 30,000 direct and indirect jobs.
The latest installment of the Saudi EV story came during the visit of China's president Xi Jinping earlier this month. Chinese electric-vehicle startup Enovate Motors announced that it had signed an agreement with a Saudi company to establish a $500 million production joint venture. Although few details have so far been made available, Enovate revealed that the production plant will have an annual production capacity of 100,000 EVs and will operate its own R&D facility.
According to PIF Governor Yasir Al-Rumayyan, who made the comment at the the Saudi Green Initiative forum held at Sharm El-Sheikh last month, Saudi Arabia now plans to build 328,000 electric cars per year. A claim that would have been hard to believe at the beginning of 2022, now appears to be the logical conclusion of the EV deals announced so far.
Coincidentally, this is the same number of EVs that Germany (the world's second largest manufacturer of EVs) produced in 2021, with a sale value of approximately € 13.7 billion ($14.57). If Saudi Arabia meets its target, it will have become one of the world's largest producers of electric vehicles.
Find out more about Saudi Arabia’s EV story:
Read Saudi’s electric dreams (10-Nov-22)
Read Saudi Arabia EV production plans (26-May-22)
Read Lucid secures $3.4b funding for Saudi plant (19-May-22)
Read Industry 5.0 coming to KSA? (28-Apr-22)
This is Part I of my series of 2022 Middle East AI News Roundup articles. You can find Part II here: Making R&D a national priority.