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Foundation Stone Laid for First Lucid Plant in Saudi Arabia

Saudi government and Lucid Motor’s officials at a ceremony to sign agreements for the development of a production facility in the Kingdom, Asharq Al-Awsat
Saudi government and Lucid Motor’s officials at a ceremony to sign agreements for the development of a production facility in the Kingdom, Asharq Al-Awsat
    Riyadh - Saeed al-Abyad
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Foundation Stone Laid for First Lucid Plant in Saudi Arabia

Saudi government and Lucid Motor’s officials at a ceremony to sign agreements for the development of a production facility in the Kingdom, Asharq Al-Awsat
Saudi government and Lucid Motor’s officials at a ceremony to sign agreements for the development of a production facility in the Kingdom, Asharq Al-Awsat

US-based Lucid Motors on Wednesday laid the foundation stone for its first-ever electric car plant outside the US at King Abdullah Economic City (KAEC) in the Saudi western city of Rabigh.

Minister of Industry and Mineral Resources Bandar Alkhorayef announced that Saudi Arabia is targeting manufacturing of more than 300,000 cars annually by the year 2030.

He said this during the inauguration ceremony on Wednesday. The electric vehicle giant’s first international plant at KAEC targets manufacturing of 150,000 vehicles per year.

Alkhorayef, who is also chairman of the Board of Directors of the Saudi Industrial Development Fund (SIDF), said that Lucid’s choice of Saudi Arabia as the headquarters of its first plant in the Middle East confirms the Kingdom’s competitiveness and its ability to exploit a number of advantages it enjoys.

These advantages are the distinguished geographical location, and the ability to connect with many regional and global markets, in addition to good infrastructure and quality of services. The KAEC plant aims to export more than 85% of its production.

According to the minister, the dossier of the automotive industry in the Kingdom is one of the important files that the national strategy for industry has taken into account as it is one of the complex industries that contribute to the development of supply chains for many products.

“The Kingdom aims to manufacture cars to cover the local demand and export globally. The volume of spending on cars in the Kingdom during the year 2020 reached nearly SR40 billion while the size of the Saudi market exceeds more than half a million cars annually, which represents 50% of the Gulf market,” he said.

He noted that the SIDF has provided financing for the construction of the Lucid plant, with a value of more than SAR5 billion.

Alkhorayef said that the establishment of a new manufacturing center for Lucid company in Saudi Arabia comes in line with the Kingdom's directions aimed at diversifying the economic base, especially the development of the industrial sector.

Saudi Investment Minister Khalid Al-Falih said that the Lucid project is vital in its investment value, the added value that will result from it, and its impact on the balance of payments, by increasing exports, contributing to environmental transformation, and reducing carbon emissions from the Kingdom.

Al-Falih added to Asharq Al-Awsat that the most important impact of the project is that it stimulates the value chain in advanced industries. Electric cars are a modern and advanced technology, and they are evolving. He explained that Lucid is known for being the best in this field, in terms of vehicle efficiency, batteries, and the technologies they contain and transport.

“The expected impact will affect industries other than the automobile industry, because it will also stimulate scientific research, product development, and the associated supply chains of basic materials, whether the industries of metals, iron, aluminum and plastics,” said Al-Falih.

For his part, Lucid Motors CEO Peter Rawlinson said that a new and important stage in Lucid’s journey to stimulate the adoption of sustainable energy technologies and solutions was launched with the new factory in Saudi Arabia.

“The new manufacturing facility is starting to support this trend from its headquarters in Saudi Arabia,” said Rawlinson.

“We are pleased to collaborate with the Public Investment Fund and the Saudi government on agreements to support our shared vision in the field of global sustainability,” he added.

The Saudi government had agreed to buy between 50,000 and 100,000 electric vehicles within ten years from Lucid Motors, which is part-owned by Saudi Public Investment Fund (PIF), the Ministry of Finance said in a press statement in September 2021.

The agreement is part of the Vision 2030 plan to diversify away from fossil fuels and create a more sustainable society.

Lucid currently manufactures cars at a plant in Arizona and the KAEC plant would assemble its electric vehicles. The factory is expected to eventually build up to 150,000 electric vehicles per year.

Both factories will build the new vehicles ordered by the Saudi government. The KAEC plant will provide thousands of jobs for Saudis. PIF owns 61 % of the California-headquartered Lucid company.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.