The Public Investment Fund (PIF) and Hyundai Motor Company (Hyundai) have announced the signing of a joint venture agreement to establish a highly automated vehicle manufacturing plant in Saudi Arabia.

Public Investment Fund will hold a 70 per cent stake in the new joint venture with Hyundai holding the remaining 30 per cent. Hyundai will also act as a strategic technology partner to support the development of the new manufacturing plant, by providing technical and commercial assistance.

The total investment for the project is estimated to exceed $500 million.

The joint venture announced at the Saudi-Korean Business Forum, aims to manufacture 50,000 vehicles per year, including both internal combustion engine (ICE) and electric vehicles (EV).

The plant groundbreaking is planned for 2024, and production is expected to begin in 2026.

The new manufacturing plant will create thousands of jobs and allow for knowledge and expertise transfer.

The localisation of Hyundai’s vehicles will accelerate the development of Saudi Arabia’s automotive and mobility ecosystem and attract further investments to the sector and the wider economy.

The partnership is Public Investment Fund ’s latest initiative to elevate Saudi Arabia as a global automotive player, drive transformation in the sector, and boost manufacturing capabilities, infrastructure and supply chains in Saudi Arabia and beyond. Among the major investments in the sector, Public Investment Fund announced recently the launch of Tasaru, the National Automotive and Mobility Investment Company, which is dedicated to localising automotive supply chains and manufacturing capabilities.

In addition, Public Investment Fund and Saudi Electricity Company announced the Electric Vehicle Infrastructure Company, with plans to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.

As the third largest automaker worldwide in terms of sales volume, Hyundai Motor Group brings invaluable technical capabilities and expertise to design, develop, and operate the vehicle manufacturing plant.

The joint venture also underscores PIF’s efforts to create national and regional champions, building local capabilities, attracting cutting-edge technology, and creating highly skilled jobs in Saudi Arabia’s automotive and mobility sectors.

Public Investment Fund’s investments are also localising automotive component manufacturing in Saudi Arabia, further strengthening the automotive supply chain.

Yazeed A. Al-Humied, Deputy Governor and Head of Mena Investments at PIF, said: “Partnering with Hyundai is another significant milestone for PIF in successfully enabling and accelerating the growth of Saudi Arabia’s automotive ecosystem – one of our 13 priority sectors. Our investment in vehicle manufacturing with Hyundai Motor Company is a pivotal milestone, aligning closely with our existing stakes in Lucid and Ceer Motors, and amplifying the breadth of Saudi Arabia’s automotive and mobility value chain.”

Jaehoon Chang, President and CEO of Hyundai Motor Company, said: “We are excited about the potential of this venture to drive significant advancements in vehicle production, fostering a sustainable and eco-friendly automotive future in the region. Our joint efforts will create opportunities for innovation and environmental progress.”

The completion of the joint venture agreement is subject to obtaining customary approvals from the relevant authorities and satisfaction of conditions.

Established in 1967, Hyundai Motor Company is present in over 200 countries with more than 120,000 employees dedicated to tackling real-world mobility challenges around the globe.

Based on the brand vision ‘Progress for Humanity,’ Hyundai Motor is accelerating its transformation into a Smart Mobility Solution Provider.

The company invests in advanced technologies such as robotics and Advanced Air Mobility (AAM) to bring about revolutionary mobility solutions, while pursuing open innovation to introduce future mobility services.

In pursuit of sustainable future for the world, Hyundai will continue its efforts to introduce zero emission vehicles equipped with industry-leading hydrogen fuel cell and EV technologies.

The Public Investment Fund is the sovereign wealth fund of Saudi Arabia. It is among the largest sovereign wealth funds in the world with total estimated assets of $776 billion. It was created in 1971 for the purpose of investing funds on behalf of the Government of Saudi Arabia.

More than 60 per cent of the fund’s activities are within Saudi Arabia. Within Saudi Arabia, the fund’s investments primarily go to private conglomerates owned by prominent Saudi business families who have close ties to the Saudi ruling family.