JEDDAH: Lucid Group celebrated the official opening of its first international car manufacturing facility in Saudi Arabia on Wednesday. Situated in King Abdullah Economic City, the new facility is not only poised to serve the local market but also has its sights set on future exports.
In an interview with Arab News, Faisal Sultan, vice president and managing director for Middle East at Lucid Group, noted that the facility’s opening marks the start of their production operations and positions them to fulfill their recently signed agreement with the Saudi government.
The agreement involves purchasing up to 100,000 vehicles over a decade, with an initial commitment of 50,000 vehicles and an option for an additional 50,000 over the same period.
Speaking about why Lucid ventured into electric car manufacturing in a country with a strong oil-based economy, Sultan said that Saudi Arabia was chosen for its strategic location and the ongoing transformative changes taking place within the country.
“With Vision 2030, Saudi Arabia is transforming from only oil dependency and going into industries, tourism, healthcare, IT, and AI. So, those things all resonate with our policy. We are also in the business of transforming the mode of transportation, the luxury aspects, and trying to get customers to contribute to our sustainability,” he said.
Sultan added that sustainability is the core policy of Vision 2030. “That was the main reason, but the other reason is the strategic location of KAEC, being on the Red Sea, giving us the opportunity to manufacture cars here, not just for local markets, but in the future to export them out through the Red Sea,” he explained.
Held at KAEC, the inauguration event had some high-profile participants including Minister of Investment Khalid Al-Falih, Minister of Industry and Mineral Resources Bandar Alkhorayef, and Governor of the Kingdom’s Public Investment Fund Yasir Al-Rumayyan, along with the US Ambassador to the Kingdom, Michael Alan Ratney, and Lucid Group leadership.
Aligning with green initiative
Al-Falih highlighted that Lucid Motors’ establishment aligns with Saudi Arabia’s Vision 2030, the Saudi Green Initiative, and the country’s commitment to sustainability and net-zero emissions.
He noted the global shift towards electric vehicles, emphasizing the importance of preserving the environment.
“Off all cars sold globally last year, EVs saw a 65 percent increase year on year, compared to a 7 percent decline for internal combustion engine cars. This rapid growth in EV sales is a testament to humanity’s dedication to preserving our planet and ensuring a safer, healthier future for generations to come,” Al-Falih said.
Furthermore, he added, through the inauguration of this facility, Saudi Arabia sends a message to the world, affirming its commitment to fostering innovation, investing in groundbreaking technologies, and spearheading environmentally sustainable advancements.
This commitment extends beyond KAEC to NEOM, home to the world’s largest green hydrogen project, and Red Sea Global, where the first off-grid, all-renewable energy system will power operations.
“We are laying the foundation for a future that prioritizes environmental consciousness right here in our own land,” the minister further added.
Meanwhile, Sultan recalled Saudi Arabia’s announcement of the SGI, aimed at ensuring that 30 percent of cars sold in the country are EVs, underlining the nation’s belief in the global necessity for such a shift.
He observed that there is a significant global shift as consumers increasingly embrace electric vehicles.
“I think for Saudi Arabia to take that bold step and to also start putting the infrastructure and the companies like Lucid being present within the country producing cars will definitely help achieve those goals for the country and also help us create the demand that is really needed to get the electric vehicles on the road,” he said.
Sultan added that a greater presence of electric vehicles on the road would unquestionably lead to reduced emissions, cleaner air, and a healthier environment for future generations.
Al-Falih affirmed that this step would position the Kingdom as a regional manufacturing hub for the broader green economy. He added that Lucid’s presence would serve as a nucleus, unlocking the value chain of the EV industry and giving rise to spin-off effects and additional investment opportunities.
Lucid’s presence in Saudi Arabia is expected to generate over 4,000 direct jobs, potential exports exceeding $117 billion, and a gross domestic product impact of nearly $50 billion.
The facility aims to promote homegrown Saudi talent and provide expert skill development training. The company also highlighted that, through an agreement with the Human Resources Development Fund, it anticipates employing hundreds of Saudi nationals in the initial years and ultimately expanding the workforce into the thousands.
For his part, Alkhorayef said in his speech: “We are quite determined to a complete cluster that will help different downstream and upstream industries, downstream chemical, and metals. We are also resolved to allow Saudi Arabia to become a global player in EVs, batteries, and so on.”
He added that they are working very closely with Lucid, Ceer, and PIF to ensure Saudi Arabia becomes a hub of innovation.
The industry minister also underscored that the occasion signifies not only the establishment of the facility but also a demonstration of the genuinely favorable investment environment in Saudi Arabia.
In his speech, Ratney stated: “This partnership will deliver the world’s most advanced electric vehicles to a global market. It will inspire increased adoption of electric vehicle technologies globally and contribute to the development of the Kingdom’s own human capital.”
He also emphasized that the timing is perfect for such a partnership, noting, “In fact, Lucid estimates that the first manufacturing plant in Saudi Arabia could generate $3.4 billion in value over the next 15 years, aligning Saudi investment and talent with US engineering, R&D, and manufacturing.”
Saudi Arabia is also investing in building a robust charging infrastructure for electric vehicles, with Lucid providing technical knowledge and support for smart charging infrastructure.
Sultan said that Lucid itself provides its customers with a charger for their home that can actually charge the vehicle within a few hours.
“But it is only when you are traveling from one city, like Riyadh to Jeddah, you will need to have the public infrastructure charging. So, we want to make sure that our customers have that through the discussions that we have with the government entities and the private sector,” he explained.
The Lucid executive revealed that they have plans to export outside Saudi Arabia once their facility is fully operational.
He stated that their strategy had been to export vehicles from Saudi Arabia upon reaching full capacity at manufacturing plant AMP-2, aiming to assemble 150,000 mid-sized platform vehicles.
Sultan mentioned technological partnerships, such as the one with Aston Martin, as part of Lucid’s long-term vision for electric mobility in Saudi Arabia.
“We will continue to look for deals like that. I think Lucid technology is something that is very far advanced than some of our competitors. And we want to make sure that this technology is used for the greater humankind’s betterment,” he said.
Sultan added that their goal is to increase the production of EVs and contribute wherever possible, be it through their own vehicles or technology partnerships, to get more electric cars on the road.
He concluded by stating that they have already assembled about 51 cars in the new facility and are “ready" for further production. Sultan noted that their current annual production capacity at the assembly plant is 5,000 vehicles, but this capacity will significantly increase once the full complex in Jeddah is completed, reaching a total of 155,000 vehicles.