Saudi Arabia’s state-owned oil company Aramco has signed a joint development agreement with China’s BYD to collaborate on new energy vehicle (NEV) technologies, the company said on Monday, marking a significant step in the kingdom’s shift toward cleaner transportation.
The agreement, signed through Aramco’s technology arm Saudi Aramco Technologies Company (SATC), aims to improve vehicle efficiency and reduce emissions as Saudi Arabia accelerates its plans to transition to electric mobility.
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“Aramco is exploring a number of ways to potentially optimise transport efficiency, from innovative lower-carbon fuels to advanced powertrain concepts,” said Ali A. Al-Meshari, Aramco’s Senior Vice President of Technology Oversight and Coordination.
The announcement follows Tesla’s high-profile launch event in Riyadh on April 10, as the U.S. electric vehicle maker seeks to regain momentum after reporting a 13% drop in global sales in the first quarter of 2025. Tesla has revealed plans to expand in the kingdom through online sales, pop-up showrooms, and Supercharger infrastructure in major cities.
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Saudi Arabia has committed to increasing electric vehicle penetration from just 1% to 30% over the next five years. However, the nation continues to face infrastructure hurdles, with only 101 EV charging stations recorded nationwide as of 2024.
The partnership brings together two of the world’s most influential energy and electric vehicle players. BYD, the leading Chinese EV manufacturer, has seen rapid growth globally, challenging Tesla’s position in multiple markets with its more affordable models. As both companies expand their international footprints, Saudi Arabia’s push to diversify its energy sector may further elevate its role in the global EV transition.