Hyundai, the top automaker in Korea, is set to establish an electric vehicle (EV) assembly plant in Saudi Arabia as the country prepares for the post-oil era. Earlier this year, Hyundai signed a Memorandum of Understanding (MOU) with Saudi Arabia’s Ministry of Industry and Mineral Resources to build the facility for assembling EVs.
Under the agreement, Hyundai plans to ship semi-produced electric cars and parts to Saudi Arabia and assemble them using the completely knocked-down (CKD) system. The two parties are expected to finalize the deal next month when Chung Euisum, the Hyundai Motor Group chair, visits the nation.
If the agreement is reached, Hyundai will be the first Korean automaker to have an assembly plant in the Middle East. Currently, Hyundai is the second-largest carmaker in Saudi Arabia, trailing behind Toyota, with over 47,000 vehicles sold in the first half of 2023.
Industry officials view the proposed EV plant in Saudi Arabia as Hyundai’s entry point into the Middle East as it diversifies away from oil. In addition to the EV assembly plant, Hyundai and its affiliates are also establishing a network in the country. Hyundai KEFICO Corp recently signed a $189 million deal with Ceer Motors for EMS and power conversion systems.
Saudi Arabia’s Public Investment Fund (PIF), which holds the largest stake in Lucid Motors, plans to launch its own electric car brand, Ceer, in collaboration with Foxconn and BMW. Lucid Motors, in turn, plans to build an EV plant in Saudi Arabia with a 150,000-unit annual capacity by 2024.
As part of Saudi Arabia’s “Vision 2030” plan, the crown prince and prime minister, Mohammed bin Salman, aims to attract advanced EVs and increase non-oil GDP to 50%. The country also aims to have a third of all cars in its capital city of Riyadh be electric by 2030.
In conclusion, as Saudi Arabia prepares for a significant industry transformation, Hyundai is eyeing the opportunity to tap into the country’s post-oil era by establishing an EV assembly plant. This move aligns with Saudi Arabia’s vision to promote advanced EVs and reduce dependence on oil.
Sources:
– The Wall Street Journal
– The Korean Economic Daily Global