Foxconn, Saudi fund form EV venture

DIVERSIFICATION:
The electric vehicle joint venture is projected to draw in US$150 million in foreign direct investment and create up to 30,000 jobs, the wealth fund said

Saudi Arabia’s Public Investment Fund Program (PIF) on Thursday said it plans to make electric vehicles (EV) in the kingdom under a joint venture, to be called Ceer, with Apple Inc supplier Foxconn Technology Group (富士康科技集團) as part of a push to build new industries and reduce its reliance on oil.

Ceer “is the first Saudi automotive brand to produce electric vehicles in Saudi Arabia, and will design, manufacture and sell a range of vehicles for consumers in Saudi Arabia and the MENA [Middle East and North Africa] region, including sedans and sports utility vehicles,” PIF said in a statement.

Its vehicles would be available in 2025, the fund said, adding that Ceer would draw more than US$150 million in foreign direct investment, create up to 30,000 direct and indirect jobs, and is projected to contribute US$8 billion to the kingdom’s GDP by 2034.

Photo: Cheng I-hwa, Bloomberg

The joint venture “will license component technology from BMW for use in the vehicle development process,” PIF said.

“Foxconn will develop the electrical architecture of the vehicles, resulting in a portfolio of products that will lead in the areas of infotainment, connectivity and autonomous driving technologies,” it added.

An investment strategy announced last year aims for more than US$100 billion in foreign direct investment annually, although Saudi Arabia lags behind those targets with more than US$4 billion in inflows in the first half of this year.

Chaired by Saudi Arabian Crown Prince Mohammad bin Salman, PIF is his chosen method to push efforts to diversify his country’s economy and wean it off oil.

Lucid Group Inc, which is more than 60 percent owned by PIF, is building an electric vehicle assembly plant in Jeddah, with a projected capacity to manufacture 150,000 vehicles a year.

The Saudi Arabian government signed a deal with Lucid to purchase up to 100,000 of its vehicles over the next 10 years.

The kingdom is also making a push into mining and said in May it would build an electric vehicle battery metals plant.

“We will leverage Foxconn’s technological expertise to support Ceer’s vision of creating a range of iconic electric vehicles that are built around the themes of connectivity, infotainment and autonomy,” Foxconn chairman Young Liu (劉揚偉) said, according to PIF’s statement.

“We want to make electric vehicles mainstream, and that is what Ceer is going to achieve in Saudi Arabia and the wider region,” he added.

PIF did not disclose funding details and did not say how much a Ceer plant would cost or where in the kingdom it would be built.

The Wall Street Journal in March reported that Saudi Arabia and Foxconn were in talks to jointly build a US$9 billion facility that could make microchips, electric vehicle components and other electronics in Neom, a futuristic US$500 billion city being built in Saudi Arabia’s desert.