Saudi Arabia can be said to be one of the most dominant countries for world oil production. This term has long been pinned in Saudi Arabia to other Arab countries.
Although Saudi Arabia’s global energy dominance has long been a drag, at least we can always hope it will end one day. When oil is no longer as attractive as it used to be, this is especially so because many countries are vying to reduce their use of fossil energy in order to save the earth.
The embedding of Saudi Arabia as an oil nation could end if you look at current developments. This situation also made Saudi Arabia start to leave its ‘comfort zone’ and look for other sectors. Saudi Arabia is now starting to explore the electric vehicle (EV) sector. Even Saudi Arabia wants to be an EV-dominated country.
In April, the Government of Saudi Arabia announced that it had signed an agreement with Lucid Motors to purchase a minimum of 50,000 electric vehicles and up to 100,000 electric vehicles over a ten year period in an effort to diversify its fleet to be more environmentally friendly.
“This agreement is a significant step that supports the key objectives of Saudi Arabia’s Vision 2030 including diversification and transformation of Saudi Arabia’s economy, society and people’s lives, building new sectors fit for the future and creating skilled jobs for future generations. It is also in line with the vision Saudi Green Initiative and the Middle East Green Initiative,” the Saudi finance ministry said in a statement.
On the other hand, Saudi Arabia’s sovereign wealth fund (SWF), the Public Investment Fund (PIF) is Lucid’s largest shareholder, with around 61% shares in the company.
“Because they are building a factory to assemble these vehicles within the Kingdom, which will shift time to full production,” the Saudi Ministry of Finance said.
Saudi Arabia is setting up its first electric vehicle factory in the country with Lucid as the government plans to ensure 30% of all vehicles in the capital Riyadh are electrified by 2030.
Lucid’s first factory outside the US will have the capacity to produce up to 150,000 Saudi Arabian electric vehicles annually.
Saudi Arabia’s Ministry of Finance said in a statement that the factory will support the government’s local content driver, diversify the economy, provide thousands of highly skilled job opportunities and provide economic benefits to the Kingdom in line with Vision 2030.
It will also help Saudi Arabia realize its ambition to become a major regional and global manufacturing base for the next generation of electric vehicles.
“Saudi Arabia is placing this order now, as demand for electric vehicles is high, many other governments are considering accepting orders. This also gives Saudi Arabia the opportunity to work with Lucid on the development of new models and vehicles that suit the needs of government vehicles,” the Arab Ministry of Finance said. Saudi.
Vehicle deliveries are expected to begin no later than 2023, with initial order numbers ranging from 1,000 to 2,000 units per year, and increasing to between 4,000 and 7,000 units from 2025.
Lucid in the regulatory filing said the Saudi government would pay the US or Saudi retail price, whichever is lower, in addition to import and other shipping costs.