The ambitions are grand for Saudi electric car company Ceer: 170,000 vehicles a year at its factory in the King Abdullah Economic City economic zone and around 30,000 new jobs.
The investment is backed by the state investment fund PIF and Taiwanese company Foxconn. And it is not surprising that oil money is being used for electric car investments, according to political science professor Steffen Hertog at the London School of Economics, who studies economic policy in the Middle East.
"CEER will not make a big difference to global oil consumption; they are trying to meet demand that is increasing anyway, so there is no immediate financial or commercial competition. Saudi Arabia is also investing - more vigorously and successfully - in renewable energy, including in countries abroad that import oil from the country," he says in an email interview with TT.
Expensive models
Ceer also collaborates with international giants such as BMW and Hyundai. The goal is for subcontractors to be largely domestic, in order to build a local ecosystem.
The first two models, an SUV and a sedan called Exobot, were unveiled in September and are now available for booking in the country. They accelerate from 0 to 100 km/h in just 2.6 seconds and have a range of 670 kilometres. The price tag is hefty, however, with the starting price topping one million.
Difficult projects
The timing is questionable. The plans for Ceer were announced at a time when China was not as dominant. Saudi ventures have also had mixed results, with some spectacular failures in recent years.
"Many gigaprojects are concerning, but other, less visible efforts to diversify the economy are actually going quite well, including in local consumer and service sectors and Islamic tourism. Ceer has been one of the more technologically ambitious projects, and those are difficult," says Hertog.
Vision 2030 is Saudi Arabia's plan to diversify its economy away from oil, which accounted for just over 70 percent of goods exports last year.
The spectacular investments are estimated to cost up to 2 trillion dollars and include investments in tourism, sports and tech, among other things.
Recently, Saudi Arabia has scaled back several initiatives, such as the LIV golf tour and plans for a World Cup stadium, while the planned city "The Line" has reportedly been scrapped.
Source: Mees, Bloomberg.