Gearing up for a ‘Made in Saudi Arabia’ Lucid EV
Few months ago, I wrote an article in Arab News titled “Investing in EV to Achieve Sustainable Growth.” In the article I talked about Saudi Arabia’s Public Investment Fund’s bold move to invest in Lucid Inc. Lucid is a US company, which makes premium electrical vehicles that will compete with the likes of Tesla and others.
In the article, I said that this is a strategic move by the world’s biggest oil exporter to become a participant in the EV industry, instead of being a bystander.
I also highlighted the fact that the investment made by PIF in Lucid made Saudi Arabia capable of achieving multiple goals envisaged in the Vision 2030 at the same time.
I talked about the socioeconomic benefit of building a Lucid manufacturing plant in Saudi that will act as a seed that could transform the Kingdom into a technology hub. It will also create innovative and rewarding jobs and domesticize skills in a high-skill sector. Another key component that we should not overlook is Saudi Arabia’s drive toward clean energy and how EVs can play a role as part of this move.
So, it was a matter of great pleasure to learn that Lucid Group is in fact taking a concrete step forward and will be building a Lucid manufacturing plant in Jeddah, Saudi Arabia that will produce 150,000 EVs a year.
The company signed the agreements earlier this week with the Ministry of Investment, Saudi Industrial Development Fund and King Abdullah Economic City to do just that. Lucid announced that this will be the company’s first international manufacturing plant outside the US, which may lead up to $3.4 billion of value over 15 years.
The decision by Lucid to build its overseas plant in Saudi wasn’t taken lightly. By all accounts, the company sees Saudi Arabia as an important pivotal hub for Lucid EVs and feels there is tremendous market potential in Saudi Arabia and in the region.
The use of EVs is also part of Saudi Arabia drive to clean energy. This is a proof that the Kingdom’s drive to clean energy is real and the country is “walking the talk” to meet its Vision 2030 objectives.
Lucid said in its statement that it reviewed multiple opportunities before selecting Saudi Arabia as the site for its first international manufacturing plant. The company said it expects to benefit from the availability of “competitively-priced commodities and a newly emerging domestic supply chain, and a factory location that facilitates global logistics”. Lucid also expects to employ “several thousand people” — primarily Saudi citizens — at the factory once full production capacity is established.
In truth, by investing billions of dollars in the Kingdom, Lucid is putting high trust into the Saudi fiscal and investment regulatory framework, and the country’s human resources capability. Saudi Arabia has been getting ready for this moment for many years. The country has been investing in the education sector for decades and in training its youth in engineering and other crucial disciplines.
The manufacturing of EVs requires high innovative skills. For example, Chemical Engineers will be needed to work on battery manufacturing whereas electrical and mechanical engineers will be needed for the production of motors and the vehicle itself. In addition, professionals with cross-sectional expertise in chemical engineering, electronics, embedded software and electrical engineering will be needed. Also, the new fields of Automotive Engineering, Electric Vehicle Engineering, Vehicle Mechanics and Vehicle Architecture will be highly sought after. Saudi universities such King Abdulaziz University in Jeddah and KAUST nearby must introduce these new majors as part of its curriculum in order to support the EV industry in the Kingdom.
Also, under the guidance of Crown Prince Mohammed bin Salman, the country has been going through a rapid transformation beginning with the overhauling of its regulatory and investment framework in order to make the Kingdom more attractive for foreign direct investment such as the Lucid plant.
Saudi Arabia is also committing to build the needed infrastructure to accommodate the use of EVs such as charging stations, etc. The good news is that Lucid is a very innovative company and its top-end vehicle model has an EPA rating of 800 kilometers of driving range on a single charge, which is 160 km longer than a Tesla Model S! This means one can drive from Riyadh to Dammam, and back without the need for stopping or charging!
The use of EVs is also part of Saudi Arabia drive to clean energy. This is a proof that the Kingdom’s drive to clean energy is real and the country is “walking the talk” to meet its Vision 2030 objectives which include reducing carbon emissions by more than 60 per cent. The Kingdom is investing in clean hydrocarbon technology ventures such as the production of blue hydrogen in NEOM. Saudi Arabia is also planning to plant 10 billion trees as part of the “Saudi Green Initiative.”
PIF investment in Lucid, and Lucid plans to make EVs in Saudi Arabia is in line with Saudi plans to implement sustainable energy strategies in the transportation sector and reduce its carbon footprint. Also, shifting to EVs means that the Kingdom can export more of its crude to meet increasing global fuel demand.
The development of EVs made in Saudi Arabia provides ample opportunity for the Kingdom to diversify its economy, improve sustainable mobility, reduce its carbon footprint while, at the same time, planting the seed for innovative industry that will create new jobs for Saudi youth in a high-end, growing industry.
It will be with great anticipation that we look forward to seeing a Lucid EV “Made in Saudi Arabia” soon.
- Fuad Al-Zayer is an independent energy consultant with expertise in energy transition, digitization, and innovation. He is the former head of the Data Services Department at OPEC and a former Global Coordinator of the JODI Data Transparency Initiative at the IEF.