Hyundai and Saudi Arabia’s Public Investment Fund (PIF) announced plans Monday to establish a new auto manufacturing plant in “The Kingdom.”
Hyundai and Saudi PIF plan new manufacturing plant
Hyundai and Saudi’s PIF signed a joint venture agreement to build a new “highly automated vehicle manufacturing plant in Saudi Arabia” at the Saudi-Korean Business Forum.
The joint venture aims to produce 50,000 vehicles per year. Although Hyundai and PIF plan to build EVs at the new plant, they will also make ICE vehicles.
Saudi’s PIF will own 70% of the new joint venture, with Hyundai holding the remaining 30%. The partners are expected to invest over $500 million in the project.
Construction is expected to begin in 2024, with production planned for 2026. Hyundai intends to act as a strategic tech partner to support the new plant.
Hyundai is the second automaker to reveal plans to build a manufacturing plant in Saudi Arabia behind Lucid.
Lucid officially opened the first EV manufacturing plant in Saudi last month. Lucid’s second plant globally has already begun semi-knocked down (SKD) assembly. Lucid’s plant is expected to produce 5,000 Air EVs annually in the first phase. Once finished, Lucid expects to have about 150,000 annual EV capacity.
Electrek’s Take
As one of the top oil producers, Saudi Arabia is looking to diversify its economy. As part of its “Saudi Vision 2030,” the region aims to raise the share of non-oil GDP to 50% from around 16% today.
The Saudi government signed a deal with Lucid to purchase up to 100,000 EVs over ten years. Will they make a similar move with Hyundai?
Meanwhile, PIF has invested around $9 million in Lucid altogether. PIF owned 60.5% of Lucid’s common stock at the end of June.
Hyundai has already announced its plans to become a top three EV producer globally, with 31 electric models by 2030. However, producing ICE vehicles at a new plant in 2026 could set them back from the competition that’s going 100% EV.