Large oil reserves, but little manufacturing industry: Saudi Arabia’s economic structure has been suffering from this for a long time. No wonder that the controversial Crown Prince of the country, Mohammed bin Salman (35), is pushing for the country to be more open to foreign investors.
It has been an open secret for a good decade that it would also be desirable to have an own car factory in the country. A few years ago, for example, the British manufacturer Jaguar Land Rover considered building a plant in the desert state. The British even signed a letter of intent for it, in 2013 the then CEO Ralph Speth declared that the talks about it “at an advanced stage “.
Nothing came of the project – but now Saudi Arabia is apparently taking another attempt with a more modern approach: How Bloomberg reports, the country has apparently hired consultants to examine the establishment of its own electric car brand in the country. According to the report, the commissioned consultants will also include the Boston Consulting Group.
The project is linked to existing plans to set up an auto supplier industry in the country and to promote local production, according to the report, which refers to people familiar with the matter.
The Saudi State Fund PIF is likely to play a role as a stirrup holder for such plans. The $ 400 billion fund had a small stake in the electric car pioneer Tesla, but sold its shares in late 2019. That happened after the Tesla boss Elon Musk mentioned in a tweet to take Tesla off the stock exchange – with the help of Saudi investors. Musk’s erratic tweet, which caused him problems with the US Securities and Exchange Commission, led the PIF managers to withdraw completely.
But shortly afterwards they invested a billion dollars in the electric car start-up Lucid Motors, which went public via Spac vehicles and whose share price development brought the Saudis huge book profits.
Apparently, Lucid is now supposed to play an important role in the kingdom’s auto plans: The PIF and Lucid are to negotiate the construction of an electric car plant near Jeddah on the Red Sea, as Bloomberg reported in January.
The platform and electric car technology developed by Lucid, which will soon be used in series production of the “Air” model, could probably also be used in a Saudi electric car of its own. The Saudis would by no means be the only country rolling around plans to build a national car brand: In the Turkey The national Togg consortium has its own electric SUV in the starting blocks, which manager magazin already reported on. And in Vietnam there is also an e-car aspirant in the young car manufacturer Vinfast, who wants to produce electric SUVs for the Asian country in the future.
With the deep pockets of the PIF state fund, Saudi Arabia would probably have the capital to push such a national auto project on a larger scale. The global competition among electric car brands is not exactly small: In China there are dozens of manufacturers who are trying their hand at it, even if only a handful actually have more global ambitions.
So far, however, Saudi Arabia has been keeping a low profile on its plans. In January, PIF boss Yasir Al-Rumayyan said, according to Bloomberg, that the kingdom wanted to take concrete steps to expand local production this year or next.
First of all, it is about electrical appliances, said the PIF boss. When it comes to cars, you are currently looking at more than one project. “These will be carried out this year or next year at the latest,” said Al-Rumayyan.