EV partnership between saudi and foxconn

Saudi Arabia has announced a joint venture with Foxconn for EV (electric vehicle) production. Both Saudi Arabia and Foxconn see a big opportunity in electric cars as the world economy transitions towards zero-emission cars.

The investment would be made by Saudi Arabia’s PIF (public investment fund) which is the sovereign wealth fund of the oil-rich country. As part of the agreement, PIF and Foxconn would form a joint venture under the name Ceer, which would sell EVs under the same brand.

Ceer would license component technology from luxury carmaker BMW. In its statement, the PIF said, “Ceer will design, manu facture and sell a portfolio of electric vehicles that will lead in the areas of infotainment, connectivity and autonomous driving technologies.”

Notably, Ceer would be the first EV brand of Saudi Arabia and would sell both sedans and SUVs in Saudi Arabia and the MENA region. Foxconn would make the electric architecture for the cars. The cars would be made in Saudi Arabia and the deliveries are expected in 2025.

Saudi Arabia Partners with Foxconn for EV Production

Notably, this is not the first time that Saudi Arabia is investing in an EV venture. It is the biggest shareholder of Lucid Motors, the US-based EV company that went public last year. PIF also participated in the PIPE (private investment in public equity) transaction when Lucid Motors merged with Churchill Capital last year.

Lucid Motors is not only ramping up production at its US plant but also investing in its second plant in Saudi Arabia. The company secured $4.4 billion from the SPAC merger last year, which was the biggest deal until then.

However, amid the continued cash burn, it again raised cash by selling shares this year. Lucid Motors shares have tanked this year amid the sell-off in EV stocks.

While several analysts have been getting bearish on startup EV companies, Ray Dalio bought more Lucid Motors shares in the second quarter. The billionaire also added more shares of Ford, NIO, and Xpeng Motors in the quarter.

Foxconn Sees a Big Opportunity in EV Manufacturing

Foxconn is famous for assembling Apple products and is the world’s largest contract manufacturer of electronics. The company now has ambitions in the EV industry where it seeks to replicate the success of electronics contract manufacturing.

The company already has partnerships to produce EVs for Fisker and Lordstown Motors and now aspires to make cars for Tesla.

At the annual Tech Day, Liu Young-way, Foxconn’s chairman said “Based on our past records for the PC and cellphone markets … we’re at about 40-45% of the overall market share. So, ambitions-wise, hopefully we are able to achieve the same kind of achievement like in the ICT (information and communications technology) industry, but we will start small, which is about 5% in 2025.”

Earlier this year, Foxconn completed the acquisition of the Lordstown plant from Lordstown Motors. Lordstown Motors had to sell the plant as the cash-starved EV startup company is fighting a survival battle amid high cash burn.

Foxconn would now produce the Endurance pickup truck for Lordstown Motors. The model is running way behind schedule and even now Lordstown Motors expects to sell about 50 of these in 2022.

There is a Churn Happening in the Automotive Industry

There is a churn happening in the automotive industry and all the legacy automakers see zero-emission cars as the future. Also, automakers are looking at partnerships to increase their capabilities.

Last month, Rivian partnered with Mercedes-Benz to produce electric vans. As part of the agreement, the two companies would build a factory in Europe to produce electric vans. The two companies expect to start production at the plant in a “few years.”

Biden Administration Is Looking to Increase EV Adoption in the US

Also, countries are incentivizing EV production in the country. US President Joe Biden signed the Inflation Reduction Act of 2022 to support the EV pivot in the country. To be eligible for the EV tax credit, the car has to be assembled in North America.

By the middle of this decade, the Act also proposes local battery sourcing requirements as the Biden administration works towards building an EV ecosystem in the country.

After President Boe Biden signed the Inflation Reduction Act of 2022, several Wall Street analysts issued bullish notes on Tesla. According to analysts, Tesla would stand to gain from the Inflation Reduction Act. After the Act was passed, Wolfe upgraded Tesla stock to a buy and raised its target price.

Related stock news and analysis

Dash 2 Trade - New Gate.io Listing

Our Rating

Dash 2 Trade
  • Also Listed on Bitmart, Changelly, LBank, Uniswap
  • Collaborative Trading Platform Token
  • Featured in Bitcoinist, Cointelegraph
  • Solid Proof Audited, CoinSniper KYC Verified
  • Trading Community of 70,000+ Members
Dash 2 Trade