Saudi Arabia Wants to Grow the EV Sector

Billions of dollars have been spent by Saudi Arabia to get into the electric vehicle (EV) market. These initiatives are a part of the larger strategy of Saudi Crown Prince Mohammed bin Salman to diversify the nation’s economy and generate jobs. The United States-based startup Lucid Motors has received at least $10 billion in investment from the kingdom. It also established an EV metals manufacturing and founded the Saudi EV firm Ceer. The Public Investment Fund (PIF), the $700 billion sovereign wealth fund of Saudi Arabia, intends to increase its EV production from 150,000 in 2026 to 500,000 annually by 2030.

 

However, by December, Ceer—which debuted in September 2023—had assembled about 800 automobiles. The Arizona state in the United States provided the kits used to build those cars. Foreign automakers have not found Saudi Arabia appealing in the past. In 2019, Toyota of Japan turned down a prospective agreement with Saudi Arabia. The business claimed that the market was too tiny, local suppliers were too few, and labor prices were too high. Oil-fueled cars are becoming less common, and analysts predict Saudi Arabia will confront competition in the electric vehicle (EV) market. The nation will confront fierce competition from well-established supply chains and manufacturing powerhouses, according to business consultancy firm EY’s Gaurav Batra.

 

Both the new supply chain and the production of EVs are now led by China. Last year, Chinese manufacturer BYD surpassed Tesla Motors to take the top spot in the international rankings for electric vehicles. Saudi Arabia is experiencing a shortage of auto parts, ranging from engines to doors. There isn’t a significant local industry that makes these products. A joint venture between the PIF and the Taiwanese corporation Foxconn, Ceer is an EV manufacturer with aspirations to introduce a vehicle by 2025. However, the company hasn’t constructed its factory yet. It was improbable that the business would have a car on the road before 2026, according to a source close to Ceer. The source agreed to talk as long as their identity remained anonymous.

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