Hyundai, Korea’s leading automaker, has announced its plans to establish a dedicated electric vehicle (EV) assembly plant in Saudi Arabia. The move comes as the country prepares for the post-oil era and aims to diversify its economy.
Earlier this year, Hyundai signed a memorandum of understanding (MOU) with Saudi Arabia’s Ministry of Industry and Mineral Resources to construct a facility for assembling EVs. Under the agreement, Hyundai will ship partially produced electric cars and parts to Saudi Arabia, where they will be assembled using a knocked-down system.
Industry sources reveal that Hyundai is expected to finalize the deal next month when Chung Euisun, the chair of Hyundai Motor Group, visits the nation. This partnership will make Hyundai the first Korean automaker to have an assembly plant in the Middle East.
Currently, Hyundai is the second-largest carmaker in Saudi Arabia, behind Toyota, with over 47,000 vehicles sold in the first half of 2023. Establishing an EV plant in Saudi Arabia will act as Hyundai’s entry point into the Middle East as it looks to diversify away from oil.
Hyundai and its affiliates are already expanding their presence in the country. Hyundai KEFICO Corp recently signed a deal valued at $189 million with Ceer Motors for EMS and power conversion systems.
Saudi Arabia’s Public Investment Fund (PIF), the largest shareholder in American EV maker Lucid Motors, is also launching its own electric car brand, Ceer, in collaboration with Foxconn and BMW. The fund has invested about $9 billion in Lucid to date.
Furthermore, Lucid Motors plans to build an EV plant in Saudi Arabia with an annual capacity of 150,000 units by 2024. It is expected that Lucid will source batteries for its EVs from LG Energy Solution, another Korean company.
Saudi Arabia aims to boost its non-oil GDP to 50% from the current 16% and attract advanced EVs as part of its “Vision 2030” plan. The country intends for a third of all cars in its capital city, Riyadh, to be electric by 2030.
As the electric vehicle market continues to grow rapidly, Saudi Arabia is positioning itself to protect its economic interests and prepare for a significant industry transformation. Meanwhile, Hyundai recognizes the upcoming transition and is eager to capitalize on the trend.
– The Wall Street Journal
– The Korean Economic Daily Global