Saudi Arabia, one of the last countries it would expect to sign up for the electric vehicle revolution, has announced plans to build and export electric cars. The world’s largest oil exporter, Saudi Arabia, aims to export more than 150,000 electric cars by 2026.
Saudi Arabia has launched its “Vision 2030” strategy for carbon emissions while putting the country on the path to strong economic growth.
The key word here is stable. With around 17% of the world’s crude oil reserves, the Saudi economy relies heavily on it and accounts for almost a portion of the country’s GDP.
However, as we have noticed in recent years, oil prices can be incredibly volatile. Oil futures turned negative for the first time since the start of the pandemic, as the price fell sharply. Earlier this year, oil prices rose above $120. consistent with barrels with limited supply capacity and booming demand.
At its most sensible, as climate updating becomes a priority around the world, it becomes: when will we see the peak in oil demand?
2022 is a record year in which countries around the world are trying to reduce carbon emissions and achieve energy independence. As a result, the deployment of renewables and electric cars has reached a new record and is already being run to reduce emissions, according to new research. In fact, renewable energy resources fully covered the global accumulation of electricity demand in the first part of 2022.
New policies in countries with the highest primary evolution are paving the way for significant reductions in CO2 emissions. Saudi Arabia is aware of this and seeks to diversify its economic interests while making an investment in the country’s future.
To expand its oil exports, Saudi Arabia has announced that it will build and export zero-emission vehicles.
Saudi Arabia made headlines after its resolution with OPEC to cut oil production. However, the country is another market with electric vehicles.
The oil-rich country announced earlier this year that it has pledged to buy at least 50,000 (and up to 100,000) electric cars from Lucid Motors as part of its “Vision 2030” plan. The strategy includes introducing complex electric cars in Saudi Arabia while expanding non-oil GDP to 50%, up from 16% today.
Lucid revealed in 2018 that Saudi Arabia’s Public Investment Fund (PIF) had invested more than a billion dollars in the start-up of electric vehicles, and then rumors circulated that the investment depended on Lucid building a production plant in the country.
It appears that Saudi Arabia is making plans for at least partially its dependence on oil through the export of electric vehicles. Abdulla Al-Swaha, Saudi Arabia’s Minister of Communications and Information Technology, said on Wednesday:
By 2026, the Kingdom will manufacture and export more than 150,000 cars.
Al-Swaha reiterated that Saudi investment in Lucid “has placed the Kingdom among the evolved countries” with a stake of 61.
According to Khalid Al-Faith, Minister of Investment, the structure began in May at Lucid’s electric vehicle production plant.
Is Saudi Arabia betting on electric vehicles? Well, I wouldn’t dare say that everyone is in the game, however, in my opinion, it is a wise resolution of the “Kingdom” diversifying away from oil.
The country is long-term and all the symptoms imply that electric cars continue to outperform their gasoline-powered counterparts. In addition, renewables are expanding at an immediate pace. When oil reaches its peak demand and starts to reverse, Saudi Arabia needs to have a backup plan, and electric cars make sense.
Electric cars are one of the fastest developing industries and are expected to continue to grow at a compound annual expansion rate (CAGR) of more than 20% until at least 2030.
Peter Johnson covers the automotive industry’s step-by-step transformation to electric vehicles. He is an experienced investor, monetary and electric vehicle enthusiast. His enthusiasm for electric vehicles, primarily Tesla, is a vital explanation for why he pursued a career in investments. If he doesn’t tell you his latest 10K discoveries, you can locate him enjoying the outdoors or exercising.