Oil giant Saudi Arabia welcomes electric vehicles to the kingdom

Oil giant Saudi Arabia welcomes electric vehicles to the kingdom

Saudi Arabia, the world’s second-largest oil producer, is developing its first electric vehicles. The year-old Riyadh startup Ceer Motors, a joint venture between the Saudi Public Investment Fund and the Taiwanese multinational Foxconn, is aiming for 2025 to debut the first Saudi-branded electric vehicles to be manufactured in the Kingdom.

oil
A prototype of the Ceer electric vehicle, Saudi Arabia’s first locally-produced car. 2023 (Photo courtesy Ceer Motors)

Ceer will design, manufacture and sell a range of vehicles, including sedans and SUVs, for consumers in Saudi Arabia and the wider region using licensed component technology from BMW.

“SAUDI ARABIA IS NOT JUST BUILDING A NEW AUTOMOTIVE BRAND, WE ARE IGNITING A NEW INDUSTRY AND AN ECOSYSTEM THAT ATTRACTS INTERNATIONAL AND LOCAL INVESTMENTS, CREATES JOB OPPORTUNITIES FOR LOCAL TALENT, ENABLES THE PRIVATE SECTOR, AND CONTRIBUTES TO INCREASING SAUDI ARABIA’S GDP OVER THE NEXT DECADE, AS PART OF PIF’s STRATEGY TO DRIVE THE ECONOMIC GROWTH IN LINE WITH VISION 2030.”

– Crown Prince Mohammad Bin Salman, Prime Minister, Saudi Arabia

Now, Ceer is partnering with King Abdullah University of Science and Technology (KAUST), a graduate research institution on the Red Sea coast, to research, develop and innovate breakthroughs in smart mobility.

Their agreement, signed October 16, 2023, covers many areas, such as connectivity and autonomous driving. It is in line with KAUST’s new strategy to transform research into economically productive innovations in sectors such as sustainable energy and industrial leadership.

By working together, Ceer’s technical experts and KAUST’s researchers aim to advance technologies and find innovative solutions that can be implemented in Saudi Arabia, with applications for Ceer’s electric vehicles.

Ceer and KAUST Innovation intend to promote economic diversification and create jobs by developing “an automotive vertical in support of Saudi-based, technology-focused SMEs and the Kingdom’s growing automotive manufacturing industry,” the partners said in a statement. Vertical integration is a business strategy to cut costs by taking ownership of two or more key stages of an operation.

Finding ways to enhance cooperation and foster knowledge exchange, Ceer and KAUST will share facilities for conducting seminars, conferences, research and development and other collaborative activities.

“Our strategy is built on our ambition to contribute to both Saudi Vision 2030 and the country’s research, development and innovation priorities,” said KAUST President Dr. Tony Chan. “We want to transform groundbreaking research in smart mobility into concepts that can be used by the electric vehicle industry and in Ceer’s own EVs.”

“By joining with Ceer, we can co-develop new ideas and applications that will help reduce emissions, make our vehicles safer and smarter, and ultimately help diversify Saudi Arabia’s economy,” Dr. Chan said.

“I am excited about the opportunity to partner with KAUST to co-create next-gen technologies for our made-in-Saudi electric vehicles,” said Ceer CEO James DeLuca. “Together, we will accelerate research in the automotive industry to create innovations here in the Kingdom while creating more high-value jobs for young nationals to further diversify the Saudi economy.”

DeLuca also is pleased with Ceer’s newly formed collaboration with Siemens Digital Industries Software announced in August.

Ceer’s engineers will design and build next-generation vehicles using the Siemens Xcelerator portfolio of industry software for the design, development, validation, and manufacturing of Ceer’s electric vehicles.

DeLuca said, “We are happy to collaborate with Siemens Digital Industries Software and deploy its portfolio of solutions at Ceer. Given the transformational changes in the automotive industry, having the right partner and the right software solution are fundamental to our mission to design, build, and sell aspirational vehicles for our customers.”

“We are delighted that Ceer has chosen the Siemens Xcelerator portfolio of industry software to help build the first electric vehicle brand in the Kingdom and to kick start the automotive manufacturing industry in the region,” said Edwin Severijn, senior vice president and general manager Europe, Middle East, Africa, Siemens Digital Industries Software.

Ceer is expected to attract over US$150 million of foreign direct investment and create up to 30,000 direct and indirect jobs. The company is projected to contribute US$8 billion direct GDP to Saudi Arabia’s economy by 2034.

Young Liu, chairman and CEO of Hon Hai Technology Group, known as Foxconn, said, “Foxconn is excited about our partnership with PIF to create a new automotive company that will focus on designing and manufacturing electric vehicles in and for Saudi Arabia.”

“WE WILL LEVERAGE FOXCONN’S TECHNOLOGICAL EXPERTISE TO SUPPORT CEER’S VISION OF CREATING A RANGE OF ICONIC ELECTRIC VEHICLES THAT ARE BUILD AROUND THE THEMES OF CONNECTIVITY, INFOTAINMENT AND AUTONOMY. WE WANT TO MAKE ELECTRIC VEHICLES MAINSTREAM, AND THAT IS WHAT CEER IS GOING TO ACHIEVE IN SAUDI ARABIA AND THE WIDER REGION.”

– Young Liu, Chairman and CEO, Foxconn

Last November, Ceer inked a US$96 million agreement with the King Abdullah Economic City to build its first manufacturing facility for electric vehicles. The facility will cover one million square meters (10.7 million square feet).

In June 2023, the Saudi Arabia’s Ministry of Industry and Mineral Resources granted an industrial licence to Ceer, the first local automotive brand to produce electric vehicles. The licence is required for Ceer to build its manufacturing facility in King Abdullah Economic City’s Industrial Valley, located on the Red Sea north of Jeddah.

The Saudi Ministry of Energy in August issued regulations for EV charging stations, essential for development of an EV-based transportation system.

While Saudi Arabia has been working on its own brand of electric vehicles, Ceer, the Kingdom also owns about 60 percent of U.S. luxury EV maker Lucid Motors, into which its Public Investment Fund recently invested US$1.8 billion.

While the Ceer factory is still in the construction stage, Lucid Motors, winner of the 2023 World Luxury Car Award, was first to open an automobile manufacturing facility in Saudi Arabia on September 27, 2023.

Lucid Group said its EV production facility will have an annual capacity of 155,000 vehicles and help create 4,500 new jobs producing Lucid’s electric vehicles for Saudi Arabia and export to other markets.

Lucid Air set a new industry benchmark for range with two versions that were the first EVs to achieve an EPA estimated range above 500 miles (800km). The company set these new standards due in part to its intense focus on range and power, delivering cars “capable of supercar levels of performance, super-fast charging, a luxurious and spacious interior, and class-leading aerodynamics,” the company said in a statement.

The Lucid facility received support from the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund, and King Abdullah Economic City. It is expected to play a pivotal role in accelerating Saudi Arabia’s strategic goal of diversifying its economy.

Through the development of electric transportation, Lucid will support the Saudi Green Initiative’s imperative to ensure 30 percent of new car sales in the Kingdom are electric by 2030.

“We are delighted to make history today in Saudi Arabia by opening the country’s first car manufacturing facility, which will produce our award-winning electric vehicles and support the country’s vision for a more sustainable and diversified economy,” said Peter Rawlinson, CEO and CTO, Lucid Group.

“As Saudi charges toward its Vision 2030, our facility will pave the way for the country’s electric automotive industry and the expansion of the supply chain, and with the support of the Saudi Government, we are proud to drive local talent development in the technology industry,” Rawlinson said. “We look forward to delivering Saudi-assembled cars to customers in Saudi Arabia and beyond.”

And now another American EV maker is coming to the Kingdom. Saudi Arabian general contracting company GCC Olayan has signed a deal with U.S. electric vehicle maker Canoo for the sale, service and distribution of Canoo EVs in the Kingdom. Based in Texas, Canoo is the latest EV operator to expand into Saudi Arabia, as the government seeks to diversify beyond petrol.

Finally, on October 22, 2023, Hyundai Motor Co.agreed to a deal with Saudi Arabia’s sovereign wealth fund to develop a US$500 million car assembly plant, joining electric vehicle maker Lucid Motors Inc. in producing cars in the oil-rich kingdom.

The Korean car company is expected to develop the facility at King Abdullah Economic City with a goal of producing 50,000 vehicles a year, both internal combustion engines and electric vehicles, said Park Jiwoo, a senior manager with Hyundai’s external affairs team. The plant will be a joint venture between the Public Investment Fund, which will hold a 70 percent stake in the Saudi venture, and Hyundai, which will own the rest, she said.

Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF, said, “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. 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.”

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