Korea’s top automaker, Hyundai, is looking to tap into Saudi Arabia’s post-oil era with a dedicated EV assembly plant in the region.
Following a new report from The Wall Street Journal claiming Tesla and Saudi Arabia are in early talks to build an EV factory (which Elon Musk has denied, calling it “utterly false”), it looks like “The Kingdom” has found another auto partner.
Hyundai is set to build a new EV assembly plant in Saudi Arabia as the country prepares for the post-oil era.
The Korean automaker signed an MOU with Saudi’s Ministry of Industry and Mineral Resources to build a facility for assembling EVs earlier this year.
Under the agreement, Hyundai plans to ship semiproduced electric cars and parts to Saudi Arabia to assemble them using a completely knocked down (CKD) system.
According to industry sources on Monday (via The Korean Economic Daily Global), the two parties are expected to finalize a deal when Chung Euisum, Hyundai Motor Group chair, visits the nation next month.
Once a deal is reached, Hyundai will be the first Korean automaker with an assembly plant in the Middle East. Hyundai is already the second-largest carmaker in Saudi Arabia, behind Toyota, with over 47,000 vehicles sold in the first half of 2023.
Hyundai eyes Saudi EV plant as post-oil era approaches
Industry officials say an EV plant in Saudi would act as Hyundai’s entry point into the Middle East as it diversifies away from oil.
Hyundai and its affiliates are already establishing a network in the country. Hyundai KEFICO Corp recently signed a 250 billion won ($189 million) deal with Ceer Motors for EMS and power conversion systems.
Saudi Arabia’s Public Investment Fund (PIF) revealed it was launching Ceer, its own electric car brand, in collaboration with Foxconn and BMW last year.
PIF is also the largest shareholder in American EV maker, Lucid Motors, owning around 61% of the company’s common stock. The fund has invested about $9 billion in Lucid to date.
Lucid has plans of its own to build an EV plant in the country with a 150,000-unit annual capacity by 2024. According to industry officials, Lucid will likely source batteries from LG Energy Solution, another Korean company.
As part of the nation’s “Vision 2030“ plan, Mohammed bin Salman, the crown prince and prime minister, is vowing to attract advanced EVs while boosting non-oil GDP to 50% from around 16% today.
The world’s largest oil producer aims for a third of all cars in its capital city of Riyadh to be electric by 2030.
As EVs continue rolling out at a record pace, Saudi Arabia looks to protect its economic interest as it prepares for a drastic industry shake-up. Meanwhile, Hyundai sees the transition coming and looks to hop on the trend sooner rather than later.
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