Foxconn is reportedly in talks with Saudi Arabia to form a joint venture whose mission will be to build electric vehicles. The move could help the oil-rich kingdom diversify its economy as the automotive industry moves increasingly away from internal combustion engines.
Saudi Arabia’s Public Investment Fund will create a new entity named Velocity, which will be the majority stakeholder in the joint venture, unnamed sources told Automotive News. Foxconn will provide software, electronics, and the electrical architecture for the new EVs, but it will remain a minority stakeholder in the project.
The outlet’s sources added that the joint venture could use a platform licensed from BMW to build its EVs. As automakers have invested heavily in developing new platforms to keep pace with the growing trend towards electrification, many have sought to offset the costs by licensing their platforms out. BMW also previously licensed out its X5 platform to Vietnam’s VinFast.
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Saudi Arabia has long been interested in diversifying its economy in an attempt to prevent itself from being too dependent on oil. Setting up a domestic carmaking industry has been part of that plan, but those attempts have so far been unsuccessful.
The kingdom’s Public Investment Fund took a majority stake in Lucid Motors in 2018 to encourage it to set up a manufacturing site near Jeddah. Bloomberg previously reported that it also hired Boston Consulting Group to explore ways to establish a domestic EV industry. The Saudi fund is also looking to develop a battery manufacturing plant that is targeting 15 gigawatt-hours of production per year by 2028. The plant would provide batteries for Lucid and other manufacturers that establish themselves in Saudi Arabia.
Foxconn, known as a key Apple assembly partner, also intends to enter the automotive sector, having unveiled three electric concepts in October, and recently took over Lordstown Motors’ Ohio plant as part of a $280 million deal.
