Vehicle manufacturer Hyundai Motor Company has signed a joint venture (JV) agreement with Saudi Arabian sovereign wealth fund the Public Investment Fund (PIF) to establish a vehicle manufacturing plant in Saudi Arabia.
The joint venture aims to manufacture 50,000 vehicles per year, including both internal combustion engine (ICE) and electric vehicles (EVs). The firms have not specified the number of each type of vehicle that the plant would manufacture.
Construction is due to begin in 2024, with first production expected in 2026. PIF will hold a 70pc stake in the JV with Hyundai holding 30pc.
Hyundai will provide technical and commercial assistance in building the $500mn plant.
“We are excited about the potential of this venture to drive significant advancements in vehicle production, fostering a sustainable and eco-friendly automotive future in the region,” says Jaehoon Chang, Hyundai CEO.
PIF has made a number of investments in the sector as it looks to boost the development of automotive supply chains in Saudi Arabia — part of wider efforts to diversify its revenues away from oil and gas.
It recently announced the launch of a national mobility investment company called Tasaru, which aims to localise EV and ICE automotive supply chains and manufacturing capabilities.
PIF has also formed the Electric Vehicle Infrastructure Company as a JV with utility Saudi Electricity Company. The JV aims to install over 5,000 EV fast chargers across Saudi Arabia by 2030.
Saudi Arabia has a target to make 30pc of new car sales in the Kingdom EVs by 2030.
“Partnering with Hyundai is another significant milestone for PIF in successfully enabling and accelerating the growth of Saudi Arabia’s automotive ecosystem – one of our 13 priority sectors,” says Yazeed Al-Humied, head of Mena investments at PIF.
Hyundai and Kia, in which it has a controlling stake, plan to sell 550,000 cars annually in the Middle East by 2030, with a growing focus on EVs. Currently Hyundai sells the IONIQ 5, IONIQ 6 and GV60 in the region.
Hyundai subsidiary Hyundai Kefico, which makes EV parts, recently signed a $189mn deal to supply EMS and power conversion systems to Ceer Motors, a joint venture between the PIF and Taiwanese technology firm Foxconn.
Last month US EV manufacturer Lucid opened its first overseas factory in Saudi Arabia, the Advanced Manufacturing Plant (AMP-2), located in King Abdullah Economic City, 80 miles north of Jeddah.
The AMP-2 facility received financial backing from state sources including the Ministry of Investment of Saudi Arabia and the Saudi Industrial Development Fund, as well as from the King Abdullah Economic City itself.
The initial operation have an annual capacity of 5,000 cars and will re-assemble Lucid Air vehicle kits that are pre-manufactured at the company’s US AMP-1 facility in Casa Grande, AZ. Lucid aims to transition AMP-2 to complete build unit (CBU) production after the middle of the decade, with an additional annual capacity of 150,000 cars.
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Tom is an experienced business writer, specialised in the energy transition
Tom is passionate about Electric Vehicles and how Tesla, BYD, Rivian, Lucid and others are transforming automotive
