Saudi Arabia, long dependent on hydrocarbon exports, will soon make a 180-degree turn. The country, led by Crown Prince Mohammed bin Salman, aspires to become a major player in the production of batteries for electric vehicles. However, this country still has a long way to go where almost 90% of exports are oil products.

Saudi Arabia is set to anticipate a fall in demand in the coming years, and the Saudi government wants to “wean” off hydrocarbons by investing in growth sectors such as the production of batteries for electric cars and vehicles.

A new “battery valley”?

Investments Minister Khalid Al-Falih expresses the kingdom’s ambitions, saying it aims to establish a real “automotive production center” in the Middle East, a decision that is part of a strategy developed more than a decade ago to diversify the Saudi economy.

Saudi Arabia plans to produce 500,000 electric cars per year by 2030an ambitious goal that requires large investments in renewable energy sources and the mining of minerals needed to produce batteries.

Several manufacturers are interested

The kingdom could have become a stronghold of the automotive industry long before that. Indeed, the tire plant is currently under construction and is intended to supply the factories of manufacturers Lucid and Hyundai.

Both companies have announced plans to expand in the country, and Tesla recently received approval to manufacture cars in Saudi Arabia. The first models that will leave this factory will be on the roads from 2024.

Despite current geopolitical tensions, Khalid Al-Falih remains confident, saying Saudi Arabia “checks all the boxes”and several Asian manufacturers have already expressed interest in the country for future investment.

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