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We’ve continued to notice that Saudi Arabia’s fast pivot towards non-oil industrialization, coupled with the Kingdom’s efforts to de-carbonize its financial output, presents a singular alternative for brand spanking new EV entrants similar to Lucid Group (NASDAQ:LCID).
With the Kingdom unveiling “down payment” funding for this green transformation a number of months again, Lucid Group, as one of many first main Western electrical automobile gamers to enter the GCC, stands to profit from its first-mover benefit.
As a refresher, Saudi Arabia constitutes the most important auto market within the GCC, accounting for round half of all automotive imports within the area. While the per capita automotive possession in the complete GCC is already elevated because of a normal lack of inexpensive public transportation infrastructure, Saudi Arabia is at the moment experiencing a singular demographic tailwind for auto demand because the ban on female-driven automobiles has now been lifted.
In 2020, the Kingdom imported automobiles value $11.2 billion. Saudi Arabia goals to chop this import quantity in half as a part of its Vision 2030 technique by boosting native manufacturing. And it’s right here that Lucid Group’s first-mover benefit comes into play. While the Kingdom has been in talks with a variety of auto producers, Lucid Group is the one main Western EV participant that has introduced agency plans to determine a devoted manufacturing facility at King Abdullah Economic City (KAEC). Dubbed the AMP-2, the manufacturing facility is anticipated to provide round 155,000 items of electrical automobiles yearly. The Kingdom has already offered incentives of round $3.2 billion to Lucid Group over a 15-year interval to determine this facility.
Saudi Arabia has additionally positioned an enormous order of as much as 100,000 EVs with Lucid Group. The order pertains to the just lately launched Air electrical automobile in addition to future fashions that the corporate intends to launch within the subsequent few years. Initial deliveries underneath this order are slated to start in Q2 2023, with the supply cadence anticipated to ramp as much as between 4,000 and seven,000 automobiles yearly beginning in 2025.
This brings us to the crux of the matter. Earlier this week, Saudi Arabia’s Ministry of Energy, in collaboration with different authorities companies and the non-public sector, unveiled the regulatory framework on EV charging stations. This framework is anticipated to supply iron-clad readability to the EV charging trade in addition to increase the uptake of electrical automobiles within the Kingdom. This ought to, after all, come as a significant boon to Lucid Group’s plan to stake out an early foothold within the nascent EV market.
Meanwhile, again in May, Saudi Arabia unveiled $6 billion in funds for a metal plate mill complicated, a “green” flat metal complicated, and a metals plant for EV batteries. This seed funding is a part of a broader plan to draw investments of round $32 billion in Saudi Arabia’s mining sector, with the Minister of Industry and Mineral Resources, Bandar al-Khorayef, terming this preliminary funding as a “down payment”.