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Lucid to Produce 150,000 EVs Per Year in Saudi Arabia

An electric vehicle on charger (Getty Images)
An electric vehicle on charger (Getty Images)
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Lucid to Produce 150,000 EVs Per Year in Saudi Arabia

An electric vehicle on charger (Getty Images)
An electric vehicle on charger (Getty Images)

Lucid Group signed an agreement with the Saudi Ministry of Investment, the Industrial Development Fund, and the Economic City at King Abdullah Economic City to construct a plant in the Kingdom that will produce 150,000 electric vehicles (EVs) per year.

The Public Investment Fund holds a significant stake of 62 percent of Lucid, in a step that reflects a strategy to select future investment opportunities that provide growth in returns.

The agreement lays the groundwork for a complete production factory in Saudi Arabia and is expected to accelerate the Kingdom's strategic goal to transform and diversify its economy through sustainable energy and transportation.

Lucid estimates that the location of its first international manufacturing plant in the Kingdom may result in up to $3.4 billion of value to Lucid over 15 years.

The 25-year-contract will enable Lucid to address the growing demand for its products.

CEO Peter Rawlinson announced that Lucid aspires to be a catalyst for change, so it makes perfect sense to bring electric vehicles to one of the world's biggest oil-producing nations.

"Establishing a global manufacturing footprint is a practical, natural step and enables us to grow our brand, scale our business, and address worldwide and untapped market demand on an entirely new level, while also taking action to address climate change through inspiring sustainable transportation," he said.

Rawlinson noted that Lucid's strong relationships with PIF and its partners at MISA, KAEC, and SIDF also give "us unique insight into the demand for luxury cars and SUVs in Saudi Arabia and beyond, and we are thrilled to introduce the world's most advanced electric vehicles to more global markets."

Lucid also expects to benefit from the availability of competitively-priced commodities and energy and a newly emerging domestic supply chain, and a factory location that facilitates global logistics.

Lucid reviewed multiple opportunities before selecting KAEC in Saudi Arabia as the optimal location and option for its first international manufacturing facility.

The new manufacturing hub will be wholly owned by Lucid and enable the company to meet the growing international demand for luxury electric vehicles.

Lucid signed a contract with Emaar Economic City to rent land for its first facility to produce electric vehicles in the Kingdom.

The company sealed a $30 million deal to lease an industrial plot in King Abdullah Economic City Industrial Valley.

The financial impact from the project will roll out on the company's financial statements during the contract duration that will run from 2022 until 2047.

The step comes as Lucid aims "to construct and operate automotive manufacturing and assembly facility together with all ancillary services," Emaar Economic City said in a statement to the Saudi bourse.

Saudi Arabia wants to attract significant foreign factories and companies due to the local market's size, positively reflecting on the national economy.

The Kingdom provided all facilities for foreign investments by amending legislation and regulations, which will attract international companies and factories to the national market.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.