Hyundai to build new factory in Saudi Arabia for cars, EVs. Here's the plan

Hyundai Motor Group will establish a new manufacturing facility in Saudi Arabia that would be responsible for rolling out a number of conventional as well as all-electric models. It is learnt that Hyundai has partnered with Saudi Arabia's Public Investment Fund (PIF) to build this factory which would require an investment of $500 million.

Hyundai has announced that it will have a 30 per cent stake in the joint venture while the remaining 70 per cent will be held by PIF. The planned factory, once complete and operating at full capacity, will be able to roll out as many as 50,000 units each year. The plant groundbreaking is planned for 2024, and production is expected to begin in 2026. This will also be the first manufacturing facility for the Korean company in West Asia.

According to a press statement issued by Hyundai, the company informs it is well positioned to cater to the Saudi market and markets in the region from the facility here. For Saudi Arabia, there is the obvious benefit of job creation for locals as well as transfer of knowledge. A country long known for its enormous oil reserves is currently transitioning towards cleaner sources of fuel. “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," said Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF. "Our investment in vehicle manufacturing with Hyundai Motor Company is a pivotal milestone, aligning closely with our existing stakes in Lucid and Ceer Motors, and amplifying the breadth of Saudi Arabia's automotive and mobility value chain."

The entry of Lucid in Saudi Arabia is significant as well because the American EV maker opened the first ever car manufacturing facility in the Kingdom last month. This facility has now begun the assembly of semi knocked-down (SKD) and has an annual capacity of 5,000 units.

File photo: A Lucid Air Dream Edition electric vehicle is seen here at the Geneva Motor Show held in Doha, Qatar.

Saudi Arabia has a stated ambition of manufacturing 300,000 EVs each year by 2030 and recognises such vehicles as a viable way to accelerate its automotive industry. Manufacturing plants here would cater to not just local demand but could potentially serve as a base for exports as well.