Saudi Arabia is powering up its efforts to become a manufacturing hub for petrol-powered and electric cars. It says it wants to make 300,000 cars a year by 2030, roughly equivalent to the annual car demand in Saudi Arabia today.

Now, its sovereign wealth fund, Public Investment Fund (PIF) has joined forces with Hyundai Motor Group, a big South Korean carmaker,  to build a car plant in the country.

The car plant will have an annual production capacity of 50,000 electric and gas-powered vehicles and is estimated to exceed $500 million in investment. The new joint venture will see PIF hold a 70% stake while Hyundai holds the remaining 30%.

“Hyundai will also act as a strategic technology partner to support the development of the new manufacturing plant by providing technical and commercial assistance,” reads the statement.

South Korea’s President Yoon Suk Yeol said the initial vehicles would roll off the production line by 2026, with no further details on the plant’s location. 

Yoon and Saudi Crown Prince Mohammed bin Salman also signed several agreements based on establishing strategic partnerships and developing green hydrogen.

Separately, American EV maker Lucid Group opened its first international manufacturing plant in Saudi this year, located in  King Abdullah Economic City, aiming to assemble the luxury electric sedan Lucid Air at a production capacity of 5,000 units yearly.

In 2022, the Gulf state also launched its first EV brand, Ceer, with $6 billion in investments for a steel plate mill complex and an EV battery metals plant.