Hyundai Motor Company and the Public Investment Fund (PIF) have recently inked a groundbreaking joint venture agreement aimed at establishing a highly automated vehicle manufacturing plant in Saudi Arabia. This ambitious project is set to become a pivotal player in the automotive industry, with the facility slated to produce both internal combustion engines and electric vehicles (EVs). The scale of this endeavor is reflected in the estimated total investment, which is anticipated to exceed a substantial $500 million.
The newly formed joint venture will see PIF, the investment arm of the Saudi Arabian government, take the lion’s share with a 70% stake, while Hyundai will hold the remaining 30%. Hyundai, in addition to its role as an equity partner, will serve as a strategic technology partner, providing invaluable technical and commercial assistance to facilitate the development of the manufacturing plant. This partnership is poised to bring together the expertise and resources of PIF and Hyundai, leveraging the strengths of each to create a formidable force in the automotive manufacturing sector.
The joint venture has set an ambitious target of manufacturing 50,000 vehicles per year, a substantial volume that underlines their commitment to making a significant impact in the automotive market. This level of production is expected to contribute to the growth of Saudi Arabia’s industrial capabilities and enhance its position in the global automotive landscape.
The timeline for this exciting project is as follows: the groundbreaking ceremony for the manufacturing plant is scheduled for 2024, and production is expected to commence in 2026. This relatively short timeframe signifies the urgency and importance of the venture in both parties’ long-term strategies.
In parallel with this venture, Hyundai has taken additional steps to support the development of sustainable mobility in Saudi Arabia. The company has signed a memorandum of understanding (MOU) with the Korea Automotive Technology Institute (KATECH), Air Products Qudra (APQ), and the Saudi Public Transport Company (SAPTCO). The aim of this collaboration is to establish and develop an ecosystem for hydrogen-based mobility in the Kingdom. Hydrogen-based vehicles are considered a promising and environmentally friendly technology, and this partnership will further diversify the automotive options available in Saudi Arabia.
Moreover, the Public Investment Fund and the Saudi Electricity Company have jointly announced the Electric Vehicle Infrastructure Company. Their ambitious plan is to install over 5,000 electric car fast chargers across Saudi Arabia by 2030. This infrastructure development is a critical component in the adoption and success of electric vehicles and reinforces Saudi Arabia’s commitment to becoming a prominent player in the electric mobility sector.
Jaehoon Chang, President and CEO of Hyundai Motor Company, expressed his enthusiasm for this groundbreaking venture, emphasizing the potential for significant advancements in vehicle production and a sustainable, eco-friendly automotive future in the region. This collaboration between PIF and Hyundai is expected to foster innovation and environmental progress, aligning with global trends towards greener transportation.
Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF emphasized the strategic importance of this partnership for Saudi Arabia. He views it as a pivotal milestone in the development of the country’s automotive ecosystem, aligning closely with their existing investments in companies such as Lucid and Ceer Motors. This venture further amplifies the breadth of Saudi Arabia’s automotive and mobility value chain, positioning the country as a significant player in the global automotive industry.
