Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, argued for cutting oil production this week © Photo by Amer Hilabi/AFP via Getty Images
Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, argued for cutting oil production this week © Photo by Amer Hilabi/AFP via Getty Images

Saudi Arabia’s $6bn push to become EV supply powerhouse

23 August 2022

Saudi Arabia has announced major investments in the battery and electric vehicle (EV) sectors — in the same week it said it was considering cutting its oil output. 

The Ministry of Industry and Mineral Resources has said it would invest $6bn into boosting mining of minerals used in batteries, as well as provide funding to the EV supply chain.

According to The Washington Post, Saudi Arabia wants lithium miners and battery makers to set up operations in the Kingdom. It has already granted Australian battery chemicals and technology company EV Metals Group permission to process lithium hydroxide monohydrate – a key compound for batteries. 

The country is reported to be processing 150 exploration licence applications from foreign companies to support production and the supply chain. 

The Saudi Arabian government announced it has signed an agreement to buy 100,000 EVs over 10 years from US-based Lucid Group, an EV manufacturer in which it owns a stake.

On Monday (22 August), the infrastructure team for EV charging stations, led by the Saudi energy ministry, announced it has completed all the legislative, organisational and technical aspects to regulate the EV charging market in the country.

The ministry said the new regulations would “contribute to achieving the goals of the ‘vision 2030’ [strategy], as they will help the kingdom to have a diversified and sustainable economy”.

The diversification strategy comes as Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, this week argued the crude futures market was becoming increasingly impacted by a lack of liquidity and high volatility.

“The market is in a state of schizophrenia, and this is creating a type of a yo-yo market and sending erroneous signals at times when greater visibility and clarity and well-functioning markets are needed more than ever to allow market participants to efficiently hedge and manage the huge risks and uncertainties they face," he said.

Saudi Arabia is the de facto leader of OPEC and one of top oil producing countries in the world.

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