Saudi Arabia wants to enter the competition to make electric cars. For this reason, the country’s Public Investment Fund (PIF) has invested 1000 billion dollars in this industry. Their goal is to make 500,000 electric cars a year by 2030. But the question is, where Saudi Arabia is still suffering from infrastructure and talent and raw material crisis in the car manufacturing industry, how much their dream of making electric cars is realized. We need to know.
In 2019, the Japanese company Toyota turned down the offer of a car manufacturing contract with Saudi Arabia. The reason is the excessive wages of workers in Saudi, the local supply shortage and the local market is small. Besides, not only in the case of electric cars, Saudi car artists have also failed to register their names before.The country has so far invested billions of dollars in building electric vehicles.
Saudi Arabia’s heir to the throne, Mohammed bin Salman, plans to wean the country’s economy off oil, Reuters reported. As part of that, Saudi Arabia has invested 1000 million dollars in Lucid Motors based in the United States.
Along with that, they have also created metal factories for their own brands and electric cars. Meanwhile, Saudi has not been able to benefit their car industry so far. Established in September last year, their own factory has sold 800 cars so far. The equipment came from Arizona in the United States.
On the other hand, due to the US INFLATION REDUCTION act, the impact of investing in low carbon emission economic activities may increase. Analysts think that it is difficult for the country to compete in the car market due to these reasons.
Saudi Arabia officials said last year that the country wants to be the center of the Middle East in the production of electric cars. But to achieve that will require the supply of raw materials like lithium. Saudi Assistant Minister of Industry and Mineral Resources H.E. Khalid bin Saleh Al-Mudaifer told Reuters they want to produce lithium, although no investment has been announced yet.
According to analysts, the world economy is moving away from fossil or fossil-based energy, which has enriched Saudi Arabia’s economy by selling fossil-based energy. So Saudi Arabia has fallen to cut oil dependence.
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Meanwhile, Reuters said Saudi Arabia’s problem is mainly internal, starting with car doors and engine parts, the necessary allied industries are not yet developed in Saudi Arabia. Moreover, in the joint venture of PIF and Taiwan’s Foxcon, Saudi’s own company’s car brand CEER will bring its own car to the market in 2025, so far they have not built a factory.
An internal source of CEER told Reuters that the company does not seem to be able to bring its own brand of cars to the market before 2026. Analysts are also doubting the success of this company.
