Ceer set to charge up Saudi Arabia's automotive sector

This year has marked a shift in the automotive manufacturing sector, with the announcement of a number of firsts for the Middle East’s car industry. The latest, and arguably most significant, news was the launch of Ceer by Saudi Arabia’s Crown Prince Mohammad bin Salman bin Abdulaziz. Ceer is the first Saudi electric vehicle brand and its portfolio of cars will be both designed and made in the Kingdom, for sale domestically as well as throughout the wider region.

By launching the first ‘Made in Saudi’ electric car, Ceer represents a pioneering foray for the Kingdom into the global automotive sector and offers a significant contribution to the nation's Saudi Green Initiative, as the country aims to become carbon-neutral by 2060. Electric vehicles (EVs) are the fastest-growing sector in the car industry for a reason; they are seen to be technologically superior, are more sustainable, produce zero carbon tail-pipe emissions, and need less servicing than combustion-engine vehicles.

Impact on every facet

Ceer has partnered with BMW and Foxconn to produce a range of EVs that will usher in new technological expertise and manufacturing capability that will impact every facet of the Kingdom's economy and industrial base.

The tens of thousands of jobs that will be created through this new local automotive industry will serve as an important pillar for national development. Research shows that each percentage point of automotive industry growth results in 1.5% GDP growth.

Ceer is projected to directly contribute US$8 billion to Saudi Arabia’s GDP by 2034.

In addition, Ceer will attract over US$150 million of foreign direct investment. Those international and local investments will play a pivotal role in establishing a thriving ecosystem, creating not only job opportunities but investment avenues through a variety of growth industries.

Building an EV hub in the Kingdom

Through Ceer's strategic international partnerships, the company will design, manufacture and sell an innovative portfolio of EVs that will lead in the areas of e-mobility, connectivity and autonomous driving technologies. Ceer is a joint venture between PIF and Hon Hai Precision Industry Co. (Foxconn). The latter will develop the electrical architecture of the vehicles. BMW will license component technology for use in Ceer's vehicle development process. 

Saudi Arabia has long sought to create a national automotive manufacturing sector. The move to manufacture cars in Saudi Arabia has long been anticipated. What may surprise some is the focus on EVs. In a wider context, this makes perfect sense. Global EV sales more than doubled in 2021, compared to the previous year, to 6.6 million. This represented close to 9% of the global car market. EVs are the future of mobility. Ceer aims to make electric vehicles mainstream by selling a diversified range of vehicles for consumers in Saudi Arabia and the MENA region, including sedans and sports utility vehicles. 

EVs are the future of mobility

PIF's launch of Ceer comes after the sovereign wealth fund's earlier investment in California-based Lucid Motors. Both Ceer and Lucid will produce cars locally, creating a manufacturing base for the Kingdom. Ceer is poised to put Saudi Arabia on the global manufacturing stage through strategic partnerships and the development of the latest e-mobility technologies, such as battery technology.

Economies of scale matter to automotive brands, and the more manufacturing plants are implanted in the Kingdom, the more cost competitive the Kingdom can be. There can be up to 30,000 parts in a single car. That level of intricacy requires advanced techniques involving technologies like robotics and concepts like Lean manufacturing. It also needs skilled people who can design new concepts. 

Evidently, a major investment in the nation's electric charging infrastructure is required to support the adoption and growth of EVs in the Kingdom. This means providing local EV owners with the ability to power their vehicles at home, the office and public spaces. The Royal Commission for Riyadh City has already set a target of 30% of the capital’s cars being electric by 2030 as part of the Saudi Green Initiative.

While EVs represent the fastest-growing sector of the automotive market globally, there are few options for Saudi consumers. Ceer will change this, giving the public a home-grown brand they can be proud of. Ceer will be the start of Saudi Arabia's automotive sector by driving the adoption of EVs in the Kingdom and beyond, and setting the path for a sustainable future for generations to come. Ceer's vehicles are scheduled to be available in 2025.

This article was provided by CEER for the business magazine GSBM, edition December 2022.