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How Saudi Arabia is racing ahead to raise investments in EV sector

This week, the kingdom has signed a $5.6 billion deal with Chinese EV company

How Saudi Arabia is racing ahead to raise investments in EV sector
[Source photo: Anvita Gupta/Fast Company Middle East]

There’s an increasing focus on electric vehicle (EV) adoption in the Middle East; countries like UAE and Saudi Arabia have unveiled ambitious goals for EV production and penetration for the coming decade, partly driven by national commitments to achieve net-zero targets within the coming decades. 

Interestingly, moving towards a post-oil future, Saudi Arabia is investing big in EVs and batteries. Its investments in EV production are expected to reach $50 billion over the next decade, with giga-projects, such as Qiddiya, Roshn, and NEOM, planning to deploy fleets of EVs.

Last year, Saudi Arabia’s Ministry of Industry and Mineral Resources announced $6 billion would be allocated to steel mining and EV battery production projects, including building an EV metals plant to attract future investment.

This week, the Ministry of Investment signed a $5.6 billion deal with Chinese electric car maker Human Horizons to collaborate on developing, manufacturing, and selling vehicles. Human Horizons manufactures electric vehicles under the HiPhi brand in China.

In addition to the $5.6 billion EV deal, the kingdom is also the majority owner of Lucid Group (61%) through its Public Investment Fund (PIF). Lucid’s first overseas manufacturing plant, set to be in King Abdullah Economic City, will build complete vehicles with a planned peak capacity of 150,000 annually. 

Part of the Saudi plan is to develop a domestic EV manufacturing industry, so in 2022, the country launched its homegrown EV brand, Ceer Motors, also backed by PIF. Ceer is among the first automotive brands to produce EVs in Saudi Arabia – the first units are expected to become available in 2025 – with plans to sell in the country and the MENA region. PIF confirmed that it has partnered with Foxconn to produce the vehicle. Ceer is projected to inject $8 billion into Saudi Arabia’s GDP by 2034. 

 Last year, Saudi Arabia announced targeting 150,000 EV exports in 2026. 

While, according to Mordor Intelligence, the Middle East and African EV market is expected to reach over $93 million by 2027, Saudi Arabia’s shift to electric vehicles is happening faster than anticipated.

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