The deals are expected to accelerate the Kingdom’s strategic goal of transforming and diversifying its economy through the development of sustainable energy and transportation.
Lucid estimated that the location of its first international manufacturing plant in Saudi Arabia may result in up to US$3.4bn of value to the company over 15 years, while the facility itself will enable it to address growing demand for Lucid products.
“Lucid aspires to be a catalyst for change wherever we go, so it makes perfect sense that we are bringing electric vehicles to one of the world’s biggest oil producing nations. Establishing a global manufacturing footprint is a practical, natural step and enables us to grow our brand, scale our business, and address worldwide and untapped market demand on an entirely new level, while also taking action to address climate change through inspiring sustainable transportation,” said Peter Rawlinson, CEO and CTO, Lucid Group.
“Our strong relationships with the Public Investment Fund and our partners at MISA, KAEC, and SIDF also give us unique insight into the demand for luxury cars and SUVs in Saudi Arabia and beyond, and we are thrilled to introduce the world’s most advanced electric vehicles to more global markets,” he added.
Rawlinson added that Lucid reviewed multiple opportunities before selecting KAEC as the location for its first international manufacturing facility. The hub will be wholly owned by Lucid and will enable the company to meet growing international demand for its luxury electric vehicles.
Lucid plans to establish operations at KAEC for the reassembly of Lucid Air vehicle ‘kits’ that are pre-manufactured at the company’s US AMP-1 manufacturing facility in Casa Grande, Arizona. Over time, this will transition to the production of complete vehicles, he said.
At peak, the company expects the KSA facility to manufacture up to 150,000 vehicles per year. Construction is expected to start in the first half of 2022, with vehicles in the initial phase slated for the domestic market in Saudi. However, plans are in place for the export of finished vehicles to other global markets, as well as exclusive models designed to appeal to customers in the region and beyond.
Rawlinson added that the company expects to benefit from the availability of competitively priced commodities and energy, as well as a newly emerging domestic supply chain, and a factory location that facilitates global logistics. The company further expects to be able access financing to build and equip the manufacturing ability and to train automotive workers, he said.
Lucid Motors' KSA production deal complements Arizona electric vehicle manufacturing
Lucid’s AMP-1 facility in Arizona will continue to serve as its central manufacturing hub, with the Lucid Production System and other manufacturing technologies refined in the United States, before deployment at other factory sites.
The company said that construction has already commenced on the second phase of AMP-1, which will add 2.85mn square feet of space. There are plans in place to further expand to an annual production capacity of 350,000 vehicles in the Arizona facility, it added.
Production capacity between the two facilities in Arizona and Saudi Arabia will be in excess of 500,000 vehicles per year in aggregate, once each facility reaches its target capacity.
Saudi Arabia’s efforts to foster an automotive ecosystem through its Saudi Vision 2030 is expected to yield costs savings for Lucid, as well as environmental benefits, with reduced transportation of product to the consumer. The project will also allow the Kingdom the opportunity to diversify and transition from fossil fuels to sustainable energy and transportation, said Khalid Al-Falih, Minister of Investment of Saudi Arabia.
“Attracting a global leader in electric vehicles such as Lucid to open its first international manufacturing plant in Saudi Arabia reflects our commitment to creating long-term economic value in a sustainable, enduring, and globally integrated way. This project demonstrates the confidence investors have in Saudi Arabia’s competitiveness, its ability to create opportunity and serve global demand for a highly complex product such as electric vehicles,” he said.
Several thousand people are expected to be employed at the KAEC facility once full production capacity is reached, with the majority expected to be Saudi citizens. In order to facilitate this, Lucid has established an internship program with the Public Investment Fund to provide educational opportunities and training for Saudi citizens at its facilities in California and Arizona, so as to develop talent for operations in Saudi Arabia.
In addition, the company will build and run dedicated training centres in KAEC to support the skills development of the workforce.
“Establishing Lucid’s new manufacturing hub in the Kingdom of Saudi Arabia is aligned with our national priority of diversifying the economy, and more specifically in growing and diversifying the industrial sector as part of the Kingdom’s Vision 2030 and The National Industrial Development & Logistics Program,” said Bandar Alkhorayef, Saudi Arabia’s Minister of Industry and Mineral Resources and Chairman of SIDF.
“We are proud to partner with Lucid to enable this new industry in Saudi Arabia, which is one of the future’s most complex and technology-dependent industries, and a major contributor to the supply chain development of other related industries that intersect with auto manufacturing.”