Manufacturing Gulf rivals jostle for position as EV test beds By Staff Writer June 14, 2022 Supplied Lucid Motors' Saudi manufacturing facility will reportedly build up to 155,000 EVs named Lucid Air Abu Dhabi facility has capacity to produce up to 10,000 vehicles a yearLucid Motors’ EV factory in Saudi is a $3.4 billion investment A collaboration has been forged between electric vehicle company NWTN and real estate investor Sultan Investments to build a manufacturing facility in Abu Dhabi. The tie-up is the latest signal of intent by the UAE to corner the fast growing EV market, rivalling Saudi Arabia’s ambitions. NWTN, previously known as ICONIQ, was founded in 2016 by Chinese entrepreneur Alan Wu as a green mobility technology firm. Under the deal announced on Friday, Middle East investment firm Sultan Investments is to construct an EV assembly base in Khalifa Industrial Zone Abu Dhabi (KIZAD) on behalf of NWTN. Saudi Arabia likely to see two more electric vehicle plantsLucid’s electric vehicle hub to create 4,500 jobs in SaudiSaudi’s Abdul Latif Jameel to invest $220m in Indian electric vehicle maker It will expand the latter’s global manufacturing network and serve its Mena and European markets. The first phase of the project comprises 250,000 sq ft of manufacturing, testing, inventory and storage space with an annual production capacity of between 5,000 and 10,000 vehicles, according to a statement from NWTN. It is due to complete in Q4 this year, with an unspecified second phase scheduled to complete by the end of Q1 2024. China-based NWTN this year relocated its global headquarters to the UAE and aims to tap into rising demand in the Gulf for intelligent electric vehicles. The UAE wants to shift to greener technologies and modes of transport to help meet the targets set in its Net Zero 2050 Strategic Initiative, which calls for AED600 billion of investment in clean and renewable energy over the next 30 years. EVs are expected to play a significant role in the initiative because transport is the biggest contributor to carbon emissions worldwide. Figures released by the International Energy Agency in February showed that global carbon dioxide emissions reached their highest annual level in 2021, while global sales of EVs more than doubled to 6.6 million since 2019, according to the IEA. The UAE has taken measures to ramp up use of EVs, including the publication of Abu Dhabi’s regulatory policy for EV charging points and related infrastructure, and the installation of more than 750 charging stations across Dubai by the emirate’s Roads and Transport Authority (RTA). The RTA has also offered EV owners free parking slots and Salik tags in its quest to make Dubai public transport emission-free by 2050. Abu Dhabi’s Department of Energy has said it anticipates demand for EVs to substantially increase over the coming years. In Dubai alone, the number of registered EVs has risen from 71 to 5,107 over the last seven years, Dubai Electricity and Water Authority said in April. Several companies are trying to cash in on the fledgling industry. Dubai-based technology firm M Glory Holding Group in March announced plans to open a AED1.5 billion EV manufacturing plant totalling almost 1m sq ft in Dubai Industrial City. The same month, UAE vehicle distributor Al-Futtaim Automotive partnered with Swedish electric car brand Polestar to sell EVs in the emirates. Saudi sees economic potential of EVs But the UAE is not the only Gulf country to see the economic and environmental potential of EVs. Saudi Arabia is also ramping up activity in this space with several recent deals. In June, Saudi conglomerate Abdul Latif Jameel said it plans to invest $220 million in Indian EV manufacturer Greaves Electric Mobility. The firm would invest an initial $150 million for a 35.8 percent stake in Greaves, it said, making it Greave’s second-largest shareholder and increasing the funds available to spend on new products, technologies and manufacturing capacity. Meanwhile, in May, construction started on US-headquartered Lucid Motors’ first EV factory in the kingdom – a $3.4 billion investment. Once complete, the manufacturing facility will reportedly build up to 155,000 EVs named Lucid Air, initially intended for the Saudi market, with regional distribution across the rest of the Middle East expected later this year. Robin Mills, chief executive of Dubai-based consultancy Qamar Energy, told AGBI: “[The spate of deals in the UAE] will be significant if Saudi Arabia imposes any kind of protectionist measures. “The region is keen [to expand the EV industry] because it is, firstly, a hedge against EVs reducing oil demand, second, a fast-growing market with the attractions of high-tech, and finally, it seems like an easier way to get into manufacturing than trying to compete with legacy carmakers. “And, of course, all of these plants will have to show that they can operate competitively in the Gulf, which is relatively high-wage and not a major manufacturing centre, although it does benefit from low energy prices and taxes.” Nasser Saidi, Lebanon-based economic analyst and chairman of the UAE’s Clean Energy Business Council, called for continued investment in EV infrastructure and policies to encourage consumers to shift from traditional vehicles, at the inaugural Electric Vehicle Innovation Summit in Abu Dhabi in May. “Charging points, the speeds and quality of EVs, and if they are able to compete with internal combustion vehicles are all important factors,” Saidi said. Adam Whitnall, co-founder and chief executive of car price comparison website Drive Ninja, said: “Manufacturing in the Middle East makes sense due to the region’s historical importance as a trade hub and its continuing ability to act as a bridge between east and west, along with its ability to service the African market which is the source of a large amount of raw material used in the manufacturing process. “We will see a significant flow of resources between Africa, Asia, and Europe as EV manufacturing accelerates, putting the Middle East in an ideal position to capitalise on this. “Investment in the EV space is a no-brainer, given that it’s now a matter of when, not if, the world switches to EVs.” He said a number of governments in developed economies have mandated deadlines for phasing out internal combustion engine (ICE) vehicles which has forced manufacturers to pour billions into EV R&D. However, he added that the EV market in the Gulf is growing at a much slower pace than other markets around the world, largely due to the relatively cheap price of oil and governments being slow to offer incentives for people to switch to EV ownership. As a result, EVs do remain a comparatively expensive option in the region, he told AGBI. NWTN, pronounced as Newton in tribute to Sir Isaac Newton, and Sultan Investments, have been contacted for comment.