Saudi's PIF and Hyundai Forge Strategic Joint Venture to Produce 50,000 Electric and ICE Vehicles Annually

Riyadh/Seoul, October 22, 2023 -  Saudi Arabia's sovereign wealth fund, PIF - Public Investment Fund and Hyundai Motor Company have formally entered into a strategic joint venture agreement to establish a state-of-the-art, highly automated vehicle manufacturing facility in Saudi Arabia. This monumental agreement was unveiled at the Saudi–Korean Business Forum, marking a pivotal moment in the advancement of the Kingdom's automotive sector.

PIF, will hold a commanding 70% stake in this pioneering joint venture, with Hyundai securing the remaining 30%. Furthermore, Hyundai will play a pivotal role as a strategic technology partner, actively contributing to the development of the new manufacturing facility by providing extensive technical and commercial support.

With an estimated total investment exceeding a staggering $500 million, this ambitious project represents a significant milestone in Saudi Arabia's endeavor to establish itself as a global automotive industry contender. The primary objective of the venture is to manufacture an impressive 50,000 vehicles annually, encompassing both internal combustion engine (ICE) and electric vehicle (EV) production lines. The groundbreaking ceremony for this futuristic facility is scheduled for 2024, with production slated to commence in 2026.

In addition to its substantial economic implications, the manufacturing plant is expected to generate thousands of job opportunities and facilitate the transfer of invaluable knowledge and expertise. This local manufacturing initiative is designed to expedite the development of Saudi Arabia's automotive and mobility ecosystem, while also attracting further investments to fortify the sector and stimulate economic growth.

The alliance with Hyundai is the latest addition to PIF's ongoing efforts to position Saudi Arabia as a dominant player in the global automotive industry. This strategic partnership is set to drive transformation in the sector, enhance manufacturing capabilities, bolster infrastructure, and invigorate supply chains within Saudi Arabia and across international borders.

PIF's recent investments in the automotive sector reflect its commitment to promoting local production and technological advancements. The establishment of Tasaru, the National Automotive and Mobility Investment Company, underscores the commitment to localizing automotive supply chains and manufacturing capabilities. Furthermore, PIF, in collaboration with Saudi Electricity Company, has recently announced the Electric Vehicle Infrastructure Company, which plans to deploy over 5,000 electric vehicle fast chargers across Saudi Arabia by 2030.

As one of the world's largest automakers by sales volume, Hyundai Motor Group brings an unparalleled depth of technical capabilities and expertise to design, develop, and operate the proposed vehicle manufacturing facility. This partnership not only amplifies PIF's mission to create national and regional champions but also enriches the local automotive ecosystem by strengthening automotive component manufacturing in Saudi Arabia, thereby fortifying the automotive supply chain.

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, emphasized the significance of this partnership, stating, "Partnering with Hyundai is another significant milestone for PIF in successfully enabling and accelerating the growth of Saudi Arabia's automotive ecosystem – one of our 13 priority sectors. Our investment in vehicle manufacturing with Hyundai Motor Company is a pivotal milestone, aligning closely with our existing stakes in Lucid and Ceer Motors, and amplifying the breadth of Saudi Arabia's automotive and mobility value chain."

The President and CEO of Hyundai Motor Company, Jaehoon Chang, expressed enthusiasm, stating, "We are excited about the potential of this venture to drive significant advancements in vehicle production, fostering a sustainable and eco-friendly automotive future in the region. Our joint efforts will create opportunities for innovation and environmental progress."

The finalization of the joint venture agreement is contingent upon obtaining customary approvals from the relevant authorities and the fulfillment of established conditions. With Hyundai's unparalleled expertise and PIF's commitment to propelling Saudi Arabia as a global automotive powerhouse, this partnership marks a pivotal moment in the advancement of the Kingdom's automotive industry.