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Foxconn Technology Group's Foxtron Model C concept electric sport utility vehicle. Photographer: I-Hwa Cheng/Bloomberg |
Saudi Arabia and Taiwan’s Foxconn Technology Group are in talks to form a joint venture to make electric vehicles, a move that could help accelerate plans by the oil-dependent kingdom to diversify its economy, according to people familiar with the matter.
Saudi Arabia’s Public Investment Fund, which manages about $450 billion of assets, will create a new entity named Velocity to be the majority stakeholder of the joint venture, said two of the people, who asked not to be named because the effort is not yet public. Foxconn will provide software, electronics and the electrical architecture for the new EVs and will be a minority stakeholder in the collaboration, according to one of people. The arrangement will help the country gain experience in manufacturing cars, another person said.
The joint venture is looking to assemble EVs on a chassis licensed from BMW AG, two people said. The parties aim to sign a deal by the end of this year, according to one of the people, although no final decisions have been made and the plans could still change.
Saudi Arabia has had ambitions for years to develop a domestic carmaking industry as part of its attempts to wean the economy off a reliance on oil sales. Those efforts have mostly failed. Now the kingdom is trying a different tactic, with the PIF leading investments into the industry. It took a majority stake in EV startup Lucid Motors Inc. in 2018 to encourage the firm to develop a manufacturing site inside the kingdom. Earlier this year, Saudi Arabia hired advisers including Boston Consulting Group to explore establishing its own domestic electric carmaker, Bloomberg News has reported.
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