The carmaker Hyundai Motor Company (KRX: 005380), in tandem with key Korean and Saudi Arabian partners, will establish an ecosystem for hydrogen-based mobility in the Kingdom of Saudi Arabia.
Hyundai in collaboration with the Korea Automotive Technology Institute (KATECH), Air Products Qudra (APQ), and the Saudi Public Transport Company (SAPTCO), revealed their Memorandum of Understanding (MOU) on Monday.
It includes collaborative support for technological services, human resources and projects for hydrogen fuel cell commercial vehicles.
“This partnership with the country’s major stakeholders represents a significant milestone in our efforts to establish a sustainable hydrogen value chain in Saudi Arabia,” Hyundai CEO Jaehoon Chang said.
“We also plan to continuously expand the hydrogen-based mobility industry in line with Saudi Arabia’s ambition to reach net zero emissions.”
Hyundai will play a significant role by providing the public transportation company with its hydrogen fuel cell commercial vehicles. KATECH, on the other hand, will explore opportunities for research and development, while APQ will secure a hydrogen supply for the partnership within Saudi Arabia.
“This cooperation opens doors for our hydrogen bus technology to enter the Middle East market,” KATECH President Seung-sik Na said. “We will work towards developing hydrogen buses suitable for high-temperature climates, enabling the domestic automotive industry to expand its presence globally.”
Hyundai Motor to establish new $500M vehicle manufacturing plant in Saudi Arabia
On Monday, Hyundai and Saudi Arabia’s Public Investment Fund (PIF) announced a $500 million joint venture to establish an electric and gas vehicle manufacturing plant. Under the agreement, PIF will retain a commanding 70 per cent stake in the newly formed joint venture, with Hyundai holding the remaining 30 per cent.
The collaboration was announced at the Saudi-Korean Business Forum and aims to bolster Saudi Arabia’s automotive industry by manufacturing 50,000 electric and combustion vehicles per year. The plant is expected to begin production in 2026.
Hyundai will serve as a strategic technology partner, offering vital technical and commercial expertise. The manufacturing plant will serve as a focal point for knowledge transfer and skill development.
Among recent investments, PIF launched Tasaru, the National Automotive and Mobility Investment Company, with a focus on localizing automotive supply chains and manufacturing capabilities. Additionally, PIF and Saudi Electricity Company introduced the Electric Vehicle Infrastructure Company, which plans to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.
“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,” MENA investments at PIF head Yazeed A. Al-Humied said in a statement.
“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.”
Saudi Arabia driving away from dependence on oil exports
Saudi Arabia seeks to reduce dependence on oil exports and promote sustainable economic growth. In 2021, the nation reaffirmed its commitment to sustainability through the “Saudi Green Initiative,” which aims to achieve net-zero carbon emissions by 2060 through investments in cutting-edge technologies and innovation.
Last July, Vale S.A. (NYSE: VALE) entered into a $3.4 billion partnership with Manara Minerals which is backed by Saudi Arabia’s government to accelerate the growth of the company’s energy transition metals business.
Hyundai Motor exported ELEC CITY Fuel Cell buses to the country in 2020. Its influence expanded further in 2021 when it exported the XCIENT Fuel Cell heavy-duty truck.