The project is linked to existing plans to build up automotive infrastructure in the country and boost local manufacturing. Saudi Arabia has hired advisers including Boston Consulting Group to explore establishing its own domestic electric-car maker, according to people familiar with the matter. Saudi Arabia’s sovereign-wealth fund said it is committed to stoking growth and diversifying the kingdom’s oil-reliant economy while declining to comment on specific projects. The $400bn Public Investment Fund has been active in the electric-vehicle space going back several years. It acquired a small stake in Tesla in 2018, and officials discussed supporting Elon Musk’s efforts to take the company private until the chief executive officer tweeted about his ambitions.
PIF sold almost all its Tesla shares before an epic rally that began in late 2019, though it’s now sitting on big gains from an investment in rival Lucid Motors. The PIF and Lucid have been in talks about building a factory near the Red Sea city of Jeddah. Emergence of battery-powered cars has inspired a range of new-vehicle projects from startups to state-owned enterprises such as Turkey’s Togg, which plans to launch several EVs in the coming years. While Saudi Arabia has more resources to shower on a project of its own, any new automaker would face a broad range of competitors sprouting up around the globe. Saudi Arabia aims to agree on deals this year or next to expand local manufacturing.