US electric car maker Lucid Group has announced that it will establish its first overseas plant in Saudi Arabia.
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When BlackRock, the world’s largest asset manager, announced this week that it would add the head of Saudi Aramco, the world’s largest oil company, to its board of directors, it may have caught some investors off-guard given its market-leading role in investing in a low-carbon future. But CEO Larry Fink, who has come under intense pressure to embrace ESG, specifically referred to Saudi Aramco CEO Amin Nasser’s “understanding of the global energy industry and the drivers of the transition to a low-carbon economy.”
The Middle East, long known as an oil and gas rich region, is investing in a new, more sustainable future that electric vehicles could rule.
Saudi Arabia is working to develop its own brand of electric vehicles, Thea.Holds about 60% of the shares of a luxury EV manufacturer lucid motorswhose public funds recently invested another $1.8 billion.
The electric vehicle sector is booming in Israel, with electric vehicle deliveries in the first half of this year 210% It was higher than the same period last year. In Bahrain, American manufacturer Gauss Auto partnered with a Bahraini firm this year. merson group Establish an electric vehicle manufacturing plant in Japan.
“There is growing recognition that countries need to do something about climate change,” said Tammy Klein, president of the Electric Vehicle Council. “I think the Middle East countries are no exception.”
One of the latest efforts to bring the future of EVs to the Middle East is the UAE partnership with Einride, a Swedish-based self-driving electric trucking company focused on the logistics market.
Just over a month ago, Einleid, which ranked 13th on CNBC’s 2023 Disruptors 50 list, announced a partnership with the UAE Ministry of Energy and Infrastructure to establish sustainable shipping within the region.
“These government-industry partnerships are happening here in the U.S. We’re doing it in Europe and around the world, not only in terms of electrification, but also charging and other types of fuels.
This is just a memorandum of understanding at this point, but it marks Einride’s entry into the Middle East and plans to develop the region’s largest autonomous and electric truck, which is expected to take five years to complete.
“This partnership goes to the core of Einride’s offering: the transformation to all-electric, efficient and sustainable transportation,” said Robert Falk, the company’s founder and CEO, in a statement.
Called the Falcon Rise Project, AinRide plans to deploy a freight mobility grid spanning more than 300 miles across Abu Dhabi, Dubai and Sharjah, comprising 2,000 electric trucks, 200 self-driving trucks and eight charging stations.
“By partnering on this transaction, we will be able to demonstrate how the entire region can migrate in an intelligent and cost-effective manner,” Falk said.
Klein was open to strategic ideas, even if they were just ideas at this point. “I think Einride has a very interesting approach in terms of the portfolio they are also offering for electrification and autonomy, and I think what they offer is particularly suitable for countries like the UAE. It is very restrained,” she said.
A common issue that arises when considering nationwide electrification is that of geographic composition. The country’s natural geography and size influences the challenge of electrification. For example, in the United States, cross-country travel requires navigating vast landscapes. But since the UAE is a “contained country,” Klein said it would be easier to go fully electrified.
Like the UAE, the Saudi government is also funding infrastructure development that will enable the widespread adoption of electric vehicles. Since 2021, the Saudi Electric Vehicle Charging Infrastructure Development Initiative (SEVCIDI) has been working toward the goal of installing 50,000 charging stations across the country by 2025.
Major U.S. and Chinese automakers are also competing for a foothold in the Middle East EV market. GM is preparing to launch the Cadillac Lyric, GMC Hummer EV and Chevrolet Volt EUV in the Middle East this year, and Ford plans to launch an EV in the region in 2024.
China is also making inroads into the region through its growing EV manufacturing sector. Saudi Arabia’s Ministry of Investment just signed a $5.6 billion deal with Chinese electric car maker Human Horizons. The UAE-owned investment firm owns a 7% stake in Shanghai-based electric vehicle company Nio after investing $738.5 million in the EV maker last month.
Other Chinese EVs are also making inroads into the market. Jeeker In Jordan, at BYD in Israel and China, which Warren Buffett’s Berkshire Hathaway has backed for years.
Oil doesn’t go down. OPEC said last month that global oil demand could rise to 110 million barrels per day in about 20 years, boosting global energy demand by 23%. ”Oil is irreplaceable for the foreseeable future,” OPEC Secretary General Haitham Al-Ghais said during a speech at the first Energy Asia Conference in Kuala Lumpur last month.
Chevron CEO Mike Worth said at the recent Aspen Ideas Festival that sanctions imposed by the EU and the US have “dramatically changed the flow of energy, but have not restricted or constrained it.” “That’s why today’s oil price is $70,” he said. “There is still plenty of supply on the market.”
The transition to EVs is near, but the timing and required investments are enormous. Wills said GM will undoubtedly meet its goal of phasing out internal combustion engines by 2035, but the need to build new supply chains for batteries and upstream minerals and metals is a big challenge.
In any case, the partnership between Einleid and the UAE could pave the way for other countries in the region to support electric vehicles, take action to fight climate change and transition their own infrastructure, paralleling the wave of EV excitement in general.
