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In its quest for economic diversification and domestic automobile industry development, Saudi Arabia has embarked on efforts to become a global hub for electric vehicle (EV) battery production following EV manufacturing.
Khalid Al Falih, Saudi Minister of Investment, said in an interview with Bloomberg TV at the Bloomberg New Economy Forum held in Singapore on the 8th (local time), “Saudi Arabia is considering investing in EV battery production and hydrogen vehicle manufacturing as the next step in the plan to establish an automobile manufacturing base in the Middle East.”
Minister Al Falih emphasized the importance of supply chain establishment, stating that Saudi authorities expect EV battery production to be an opportunity for crucial supply chain establishment.
Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia, has focused on manufacturing for the past seven years to reduce the country’s dependence on oil and diversify its economy but has not made significant progress. The reality is that over 90% of exports are still dominated by oil and related products.
In response, Saudi Arabia, the world’s largest oil producer, has recently turned its attention to renewable energy business ventures and battery-related mineral mining. It has also set a goal to produce 500,000 electric vehicles by 2030.
In addition, to build a broader supply network centered around the nascent automobile industry, it agreed to construct a factory worth $550 million with Italian tire company Pirelli SpA. The tires produced at this factory are expected to be supplied to Lucid Group, an American EV company, and Hyundai, which plans to build a factory on the western coast of Saudi Arabia.
As part of efforts to attract foreign talent and investment, Saudi Arabia has restricted business with foreign companies that do not have regional headquarters in the country by January of next year. The plan is to increase the number of companies operating in the Middle East from Saudi Arabia to 160 by the end of this year.
Minister Al Falih explained that more than 180 companies could receive incentives provided when establishing regional headquarters, with an additional 10 companies being added per week.
Regarding the war between Israel and the Palestinian militant group Hamas, Minister Al Falih expressed confidence, saying, “Considering the opportunities provided by Saudi Arabia, we are not worried about the possibility of investment inflows being interrupted by war.” He added, “Despite the current situation in Europe, the Middle East, and parts of Asia, people will realize that Saudi Arabia is the most suitable investment destination.”
By. Seon Miri
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