Hyundai Motor Co., Korea’s top automaker, plans to construct an electric vehicle assembly plant in Saudi Arabia as part of its expansion into the Middle Eastern market. The company signed a memorandum of understanding with the Saudi trade ministry earlier this year to establish the EV factory. It is expected that Hyundai will send semi-finished electric vehicles and parts to Saudi Arabia for assembly and sale in the local market. The formal agreement is likely to be signed during Hyundai Motor Group Chairman Chung Euisun’s visit to the country next month.
Saudi Arabia is an important market for the Korean automaker, with Hyundai being the second-largest car seller in the country after Toyota. The establishment of an EV assembly plant in Saudi Arabia would serve as Hyundai’s production base for entering the eco-friendly car market in the Middle East. Other affiliates of Hyundai Motor Group, as well as EV-related Korean companies, are also exploring business opportunities in Saudi Arabia.
Furthermore, Hyundai KEFICO Corp., an affiliate of Hyundai Motor specializing in automotive electronic management systems, recently secured a deal worth $189 million to supply EMS and power conversion systems to Ceer Motors, a joint venture between the sovereign wealth fund of Saudi Arabia and Taiwanese tech firm Foxconn. Lucid Motors, an American EV maker in which the Saudi wealth fund has a majority stake, has plans to establish an EV plant in Saudi Arabia with an annual production capacity of 150,000 units by 2024.
Saudi Arabia has been actively promoting electric vehicles as an alternative to traditional fuel-powered cars. Crown Prince Mohammed bin Salman aims to convert one-third of all cars in Riyadh into electric vehicles by 2030. In addition, the country is developing Neom, a smart city that will be fully powered by renewable energy sources such as solar power and green hydrogen.
Hyundai, along with other Korean companies, has been strengthening its partnership with Saudi Arabia, with several deals totaling $30 billion being signed during the visit of the Saudi crown prince to Seoul last year. Hyundai Motor Chairman Chung and other top business leaders are expected to visit Saudi Arabia next month to further discuss business partnerships.
Sources:
– Il-Gue Kim and Sungsu Bae at [email protected]
– In-Soo Nam (editor)
– Image source: Saudi Arabia Auto Show 2021 (No author mentioned)