Saudi Arabia Finds Its Way into the Electric Vehicle Market

The Saudi Ministry of Industry and Mineral Resources on Friday announced $6 billion in funding for a plant that will manufacture metals for electric vehicle batteries, plus plans for another $32 billion invested into Saudi Arabia’s mining industry.

Al-Arabiya quoted Industry and Mineral Resources Minister Bandar al-Khorayef’s description of the investment plan:

The nine projects include a $4 billion steel plate mill complex for the shipbuilding, oil and gas, construction and defense sectors and a “green” flat steel complex that will supply the automotive, food packaging, machinery and equipment, and other industrial sectors.

Both projects are already underway, as is a $2 billion EV battery metals plant.

…

“These targeted investments represent an important ‘down payment’ in our efforts to move beyond exploration and extraction and into the creation of integrated value chains, a central focus of our overall mining strategy,” al-Khorayef said in the statement.

In April, the Saudi government signed a deal with Lucid Motors to buy at least 50,000 electric vehicles over the next ten years. 

Saudi officials called the deal “a significant move that supports the key objectives of Vision 2030 including diversifying and transforming the economy, society and lives of the people of Saudi Arabia, building new sectors fit for the future and creating skilled jobs for future generations.”

Saudi Vision 2030 is the plan promoted by de facto ruler Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy away from complete reliance on the oil sector. The plan was approved by the Saudi cabinet in 2016.

Lucid was selected as the electric vehicle provider because the Saudi sovereign wealth fund holds a 62-percent stake in the American company and because Lucid promised to build a factory in Saudi Arabia to assemble the cars.

When it becomes operational, the plant will be Lucid’s first factory outside the United States, capable of producing 150,000 electric vehicles per year. Lucid’s primary plant, located in Arizona, has been struggling to meet production goals due to supply chain issues.

Developing the Saudi mining sector is a major component of the Vision 2030 program. The plan envisions explosive growth in mining as the foundation for diversifying the rest of the Saudi economy, tapping into long-discovered mineral resources that were largely ignored while the kingdom focused on fossil fuels.

The Saudi Geological Survey has identified over 5,000 mineral deposits that could be exploited, including high-demand minerals such as cobalt, lithium, bauxite, titanium, and even uranium, which is earmarked for at least two nuclear reactors. 

The Saudis are keen on developing their own refining capacity as well, to avoid the reliance on foreign processing that makes the oil industry volatile. Lithium extraction and manufacturing are particularly desirable because China currently has a stranglehold on supplying materials for the lithium-ion batteries used in electric vehicles.