Saudi Arabia aims to become a car producer, driven by accelerating electrification trends.
The plug-in small car market will exceed 10 million units by 2022, and the global spread of BEVs is gaining momentum. While front-runner Tesla is being pursued by major European, US, Japanese and Korean car manufacturers, as well as Chinese companies such as BYD, one point of interest is that some countries are taking the opportunity of electrification to become car-producing countries.
One such country is Saudi Arabia, which has set a target of increasing its production to 500,000 vehicles per year by 2030. The country has never produced cars on a large scale before, with US start-up Lucid Motors, in which the PIF (Saudi Public Finance) is the largest shareholder, planning to start production by the end of 2023, and the establishment of a BEV joint venture between Taiwan’s Hon Hai and the PIF in November of the previous year. It plans to launch the country’s first car brand, Ceer, to design, manufacture and sell vehicles under a technology licence from BMW, with a target launch date of 2025. The companies have an annual production capacity of 320,000 vehicles in total, with Lucid producing 150,000 and Ceer 170,000. In addition to this, Hyundai Motor and China’s Enovate (Tianjing Automobile) have agreed to sign a contract for local assembly between the end of 2022 and January 2023; Enovate intends to assemble around 100,000 vehicles a year, which will bring it much closer to achieving the 500,000-unit scale. In the battery sector, Australian start-up Avass Group and EV Metals have agreed to set up production bases in the country for batteries and electrode materials respectively.
While the figures show that the targets are being met, whether they can become a reality is another story. Will the business attracted with large incentives take off, take root and become one of Saudi Arabia’s key industries? The key will be to develop the supply chain and attract further players.