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)
TT

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.



OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters
TT

OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters

OPEC cut its forecast for global oil demand growth this year and next on Tuesday, highlighting weakness in China, India and other regions, marking the producer group's fourth consecutive downward revision in the 2024 outlook.

The weaker outlook highlights the challenge facing OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, which earlier this month postponed a plan to start raising output in December against a backdrop of falling prices.

In a monthly report on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million bpd forecast last month. Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.

In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million bpd from 1.64 million bpd, Reuters.

China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 bpd from 580,000 bpd and said diesel use in September fell year-on-year for a seventh consecutive month.

"Diesel has been under pressure from a slowdown in construction amid weak manufacturing activity, combined with the ongoing deployment of LNG-fuelled trucks," OPEC said with reference to China.

Oil pared gains after the report was issued, with Brent crude trading below $73 a barrel.

Forecasts on the strength of demand growth in 2024 vary widely, partly due to differences over demand from China and the pace of the world's switch to cleaner fuels.

OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency's far lower view.

The IEA, which represents industrialised countries, sees demand growth of 860,000 bpd in 2024. The agency is scheduled to update its figures on Thursday.

- OUTPUT RISES

OPEC+ has implemented a series of output cuts since late 2022 to support prices, most of which are in place until the end of 2025.

The group was to start unwinding the most recent layer of cuts of 2.2 million bpd from December but said on Nov. 3 it will delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.

OPEC's output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million bpd in October, up 215,000 bpd from September. Iraq cut output to 4.07 million bpd, closer to its 4 million bpd quota.

As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas.

Russia's output edged up in October by 9,000 bpd to about 9.01 million bpd, OPEC said, slightly above its quota.