The Lucid Group will build the first factory in Saudi Arabia outside the United States

US electric vehicle maker Lucid Group will set up its first overseas factory in Saudi Arabia, the company has announced.

Javier Blas | Bloomberg | Getty Images

US electric vehicle maker Lucid Group will set up its first overseas factory in Saudi Arabia, the company has announced.

The manufacturing facility will be able to produce 155,000 cars a year and will initially serve the local market, the luxury carmaker said in a press release on Wednesday. The cars will be exported to the world market later.

Lucid’s factory in Arizona could produce 350,000 units a year.

“This means we can accelerate our plan to produce half a million cars a year by 2030, by the middle of the decade,” Peter Rollinson, CEO of CNBC’s Hadley Gamble, told CNBC. “And that’s really important because the planet can’t wait.”

The ongoing power crisis “really only fuels the conversion to battery-powered electric vehicles,” Rollinson said.

“Demand has multiplied now,” he said.

EV industry ambition

Saudi Investment Minister Khalid al-Falih says the Lucid factory is just beginning.

“I believe it opens up the whole electric vehicle industry here in the state, our purpose is not to stop with Lucid,” he told CNBC’s Hadley Gamble.

“We have other EV manufacturers who are in advanced discussions with us who will follow in Lucid’s footsteps,” he added.

He said Saudi Arabia wants to set up shop in EV battery companies, suppliers and many more countries, which could create 30,000 jobs.

“We believe, as I have said, that this is a catalytic investment decision. It is a magnet that will attract many other investors,” al-Falih said.

Lucid’s Rawlinson said the company would like to produce more in Saudi Arabia than electric vehicles and pointed to energy-saving systems that could be combined with solar photovoltaic farms.

“This technology is ideal for this part of the world,” he said. “Because remember, when the oil runs out, the sun will continue to burn.”

As of 2021, Saudi Arabia was the world’s second-largest oil producer, according to the US Energy Information Administration. It has 297.5 billion barrels of oil reserves, second only to Venezuela, according to a World Population Review ranking.

The state-owned oil company, Aramco, increased its net income by 82% to $ 39.5 billion in the first quarter of 2022.

Al-Falih said the world still needs to invest in both fossil fuels and renewables to make energy transfers as smooth as possible.

He spoke in support of the US Alliance, but said that maintaining some independence was important for Saudi Arabia.

– Dan Murphy of CNBC contributed to this report.

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