PIF, the sovereign wealth fund in Saudi Arabia, has announced that it will start manufacturing electric vehicles (EVs) within the kingdom through a partnership with Foxconn, a company that makes iPhones for Apple Inc. This foray into the EV space is geared at diversifying the kingdom’s economy away from overdependence on oil.
In a statement, the wealth fund indicated that Ceer would be the first EV brand produced in Saudi Arabia by the Saudi government-owned fund. The statement added that the brand would design, produce and market several models of electric vehicles to consumers primarily in Saudi Arabia as well as North Africa and the Middle East, a region known as MENA. The vehicles made would include SUVs and sedans, the statement added.
PIF expects to attract foreign direct investment worth at least $150 million, create more than 30,000 employment opportunities (both indirect and direct) and inject a minimum of $8 billion into the kingdom’s GDP in the years leading up to 2034. The Ceer EVs are expected to hit the market in 2025, according to projections made by PIF.
This joint venture intends to be licensed by BMW to use its EV component manufacturing technology to develop the Ceer electric vehicles. Foxconn is expected to develop the electrical architecture of the EVs in a way that positions the vehicles as market leaders in terms of connectivity, autonomous driving and infotainment technologies.
It should be noted that Saudi Arabia set an ambitious target of attracting foreign direct investment into the country worth at least $100 billion every year. However, the country has performed dismally against that target; by the end of June 2022, only $4 billion in FDI had been attracted into the country. PIF, whose chair is Crown Prince bin Salman, was created with the intention of weaning Saudi Arabia off its dependence on the oil and gas industry.
PIF has had interest in electric vehicles for a while now. The wealth fund owns a more than 60% stake in Lucid Group Inc., and the company is in the process of setting up an EV assembly facility within Jeddah. Lucid will make at least 150,000 EVs annually once this plant is operational, and the government of Saudi Arabia has undertaken to purchase 100,000 EVs from the company over the coming 10 years.
Saudi Arabia is also branching out into mining, with a special focus on battery metals. Given the way some metals, including lithium, have become a supply concern, it is just as well that PIF is looking into having a battery metals supply chain. The world waits to see how Ceer EVs will perform in comparison to others from manufacturers such as NIO Inc. (NYSE: NIO), which are already on the market.
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