Saudi Arabia is advancing its automotive industry with the establishment of the King Salman Automotive Cluster at King Abdullah Economic City, a project announced by His Royal Highness Crown Prince Mohammed bin Salman. This cluster is set to become a central hub for automotive manufacturing and innovation, hosting major companies such as Ceer, the country’s first electric vehicle brand, and Lucid Motors, which launched its first international facility in the city in 2023, according to the Associated Press.
Key joint ventures within the cluster include a partnership between the Public Investment Fund and Hyundai Motors to build an automated car factory, and a collaboration with Pirelli to establish a local tire manufacturing plant. These initiatives are designed to expand manufacturing capabilities, enhance research and development, and streamline supply chains for both regional and international markets.
The cluster is part of Saudi Arabia’s broader strategy to lead in the electric vehicle sector and aligns with the National Industrial Strategy, which aims for 36,000 factories by 2035. Dedicating the cluster to King Salman highlights its role in supporting the National Industrial Development and Logistics Program, a cornerstone of Vision 2030.
A strong focus on localization will create a comprehensive automotive ecosystem, including tire and battery manufacturing, to reinforce the local supply chain. Hyundai Motors’ planned factory is expected to produce 50,000 vehicles annually, spanning electric and internal combustion models.
This initiative also supports Saudi Arabia’s commitment to achieving net-zero carbon emissions by 2060. The Kingdom recently set a record by auctioning 1.4 million tonnes of carbon credits through the Public Investment Fund, as reported at the Future Investment Initiative in Riyadh.
The cluster is expected to significantly boost exports, with a target of manufacturing and exporting over 150,000 electric vehicles each year by 2026. It is also designed to attract substantial foreign investment—$100 billion annually by 2030, according to the Associated Press. Specific projects include a $500 million investment from the Hyundai joint venture and $550 million for the Pirelli tire facility.
By 2030, the King Salman Automotive Cluster aims to position Saudi Arabia as a leading global automotive manufacturing hub, supporting economic diversification and reducing reliance on oil exports. The project will generate thousands of jobs for Saudi nationals, with Ceer alone projected to create up to 30,000 jobs, attract over $150 million in foreign investment, and contribute $8 billion to the Kingdom’s GDP by 2034, according to the Associated Press.
