SOUTH KOREA REPORT
Hyundai Motor Company has started to develop the EV market in the Middle East. The strategy is to get a head start in the market by making large investments. In response to the global movement to reduce carbon dioxide emissions, interest in the EV market is high in the oil-producing countries of the Middle East.
On Oct. 22, 2023, Hyundai Motor Company, which is expanding its business into environmentally friendly hydrogen energy in addition to local vehicle production, signed a joint investment agreement with the Saudi National Fund to establish a semi-finished product assembly plant. The joint venture plant will be built in King Abdullah Economic City and will have an annual production capacity of 50,000 units.
The JV plant will produce both EVs and regular vehicles and is expected to start construction in the first half of 2024 and production in the first half of 2026. Hyundai intends to make this plant its central production base in the Middle East and North Africa.
If the company can solidify its position as an EV manufacturer in Saudi Arabia, it can serve as a foothold for expansion into the surrounding Middle East region. Minister of Investment Khalid Al Fareef has outlined a plan for Saudi Arabia to become an EV manufacturing hub with an annual production capacity of 500,000 units by 2030.
Source: KOREA WAVE
PSR Analysis: Saudi Arabia is poised to become the center of the EV industry in the Middle East region, and in September, LUCID Group, an emerging U.S. EV manufacturer, announced the opening of its first overseas plant in Jeddah. LUCID is 60% owned by a Saudi Arabian sovereign wealth fund.
Both Tesla and Saudi Arabia are in early-stage discussions to build manufacturing industries. As I have pointed out many times, Hyundai Motor has been very active in developing markets outside of China, with a particularly large investment in the US state of Georgia, where it is expanding with several parts suppliers and trying to establish a local manufacturing supply chain. While it may be some time before this investment in Saudi Arabia bears fruit, it is an indication of the company’s judgment that the upfront investment is worthwhile. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
