The Kingdom of Saudi Arabia continues its efforts to diversify the economy of the largest oil-exporting country in the world, by expanding the attraction and localization of non-oil industries, including the electric car industry.

The Kingdom seeks to become a center for the manufacture of electric vehicles in the Middle East, as part of a plan to diversify its economy, by 2030.

And Saudi Investment Minister Khaled Al-Falih announced last week that the Kingdom seeks to produce 500,000 electric cars annually by 2030, referring to an expected announcement in the first half of this year of a new partnership project between Saudi Arabia and a global company for the production of electric cars.

Al-Falih said, in an interview with Asharq Al-Awsat newspaper, that efforts to diversify the economy are continuing in full swing, stressing that foreign direct investment has become nearly 3% of the gross domestic product in Saudi Arabia, and is expected to reach 5.7% by 2030.

Continuous efforts

Saudi Arabia has officially entered the world of manufacturing and developing electric cars by launching the first brand of electric vehicles in the Kingdom under the name "Sir", which was revealed in November 2022 by Saudi Crown Prince Mohammed bin Salman.

The “Sir” company is a joint venture between the Saudi Public Investment Fund and the Taiwanese “Foxconn” company, and the German company “BMW” will provide licenses for electric vehicle components to the company.

"Sir" will design, manufacture and sell electric cars, and will also work to manufacture technical systems with the feature of self-driving cars, in addition to its contribution to achieving the Kingdom's goals in reducing carbon emissions and preserving the environment in order to promote sustainable development, as the company's cars are scheduled to be available for sale in 2025.

It is expected that the "Sir" company will attract foreign investments to the Kingdom amounting to 562 million riyals (about 150 million dollars), in addition to providing 30,000 job opportunities and contributing to the GDP of 30 billion riyals (8 billion dollars) by 2034.

Commenting on the efforts of the Kingdom of Saudi Arabia to expand the production of electric cars, the Saudi expert and economic advisor, Suleiman Al-Assaf, says that the Kingdom is the second producer of oil and the first exporter in the world, but despite this it is heading to enter the field of manufacturing electric cars.

The "Seer" company is a joint venture between the Saudi Public Investment Fund and the Taiwanese company "Foxconn" (Seer website)

Al-Assaf indicated - in a statement to Al-Jazeera Net - that "the goal is to comply with the global trend towards this type of vehicle in order to preserve the environment, reduce material costs and save energy."

He added that Saudi Arabia has realized the importance of this sector, and contributed a large percentage to the “Lucid” company for the electric car industry, in addition to attracting several other international companies and signing agreements with them in order to establish factories in the Kingdom in order for Riyadh to be a leader in the electric car industry, whether In terms of assembly at the beginning, or the manufacture of components and entry into the sensitive parts and components of this industry later.

quality investments

The announcement of the launch of the first “Sir” brand for the electric car industry in Saudi Arabia comes about 6 months after the “Lucid” group for electric cars signed an agreement to start establishing the first integrated production plant for its electric cars in the Kingdom.

Lucid, the American competitor to Tesla, seeks to produce 150,000 cars annually after completing its factory in King Abdullah Economic City in Rabigh on the Red Sea coast in western Saudi Arabia, noting that the Saudi Public Investment Fund owns a majority share (62%). In "Lucid", whose shares are traded in the American market.

During the official signing ceremony for the construction of the "Lucid" factory for electric cars as the first factory outside the United States, Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef said that this project will produce 300,000 electric cars before 2030, considering that the presence of the company's second factory in the world in Saudi Arabia is a great indication. However, the Kingdom is able to attract qualitative modern investments.

In line with the Kingdom's vision to shift towards clean energy and reduce carbon emissions, the Saudi multi-activity Abdul Latif Jameel Group signed an agreement last June with the Indian "Greaves Electric Mobility" for electric vehicles to invest 825 million riyals ($220 million). In the company.

The Saudi group will make an initial investment of 560 million riyals ($150 million) in return for a 35.8% stake in the Indian company, followed by an investment of 262 million riyals ($70 million) within 12 months.

The agreement is the second Saudi investment step of this huge level in the field of electric cars, after the agreement to establish the “Lucid” factory as the first integrated production plant for electric cars in Saudi Arabia.

In the same context, the Saudi "Sumou Holding" company announced last week the production of its first electric cars within a period of 12 to 18 months.

The CEO of the company, Saeed Al-Nahdi, said in an interview with the "Economy of the East" channel that His Highness Holding chose the Chinese company "Enovate Motors International" as a partner to establish a factory for the production of electric cars in the Kingdom with a production capacity of 100 thousand cars annually.

Al-Nahdi indicated that the two companies signed the memorandum of understanding during Chinese President Xi Jinping's visit to Saudi Arabia last December.

Lucid's electric car factory in Saudi Arabia will be the company's first factory outside the United States (Reuters)

An important station in the Middle East

In turn, the Saudi economist Suleiman Al-Assaf indicates that in light of the Kingdom's interest in green hydrogen and clean energy and its current trend towards electrical industries, "it seeks to become an important station in the Middle East region for the services sector and the clean energy sector, and this is strongly observed in the NEOM project." In addition to projects related to renewable energy, in which the Saudi Public Investment Fund contributes strongly.

In conclusion, Al-Assaf expects that the Kingdom will pump more than 80 billion Saudi riyals (about 21 billion dollars) into this industry in order to carve out an important share of the electric car sector worldwide in light of the international trend towards this industry, which is expected to dominate the car market. In the year 2050.

For his part, Ayed Al Suwaidan, a Saudi expert specializing in economic and energy affairs, says that the "Saudi Arabia 2030" vision and the ambitious Public Investment Fund strategy focus on launching and enabling promising priority sectors in the Kingdom, which include the automotive and mining sectors.

Al-Suwaidan points out that the Kingdom has enormous wealth in the mining sector, amounting to more than $1.3 trillion, so it seeks to benefit from it in developing several sectors, the most important of which is the sector of renewable energies and electric cars.

And Al-Suwaidan confirms in a statement to Al-Jazeera Net that Saudi Arabia is determined to enter the electric car industry, whether through acquisitions and partnerships, or even bypassing that and launching the first Saudi brand for electric car industries, such as the "Sir" brand.

The economist adds that through this cooperation, electric cars will be fully manufactured inside the Kingdom, and that "the importance of the electric car industry lies in transferring knowledge and capabilities, exchanging experiences, creating high-quality jobs, diversifying sources of income, and also increasing the country's gross domestic product."

He pointed out that there is talk about the possibility of South Korean car companies entering the Kingdom during the current year to raise the percentage of electric companies present in the country.