Saudi PIF to invest in China-based EV maker

Saudi Arabia’s Public Investment Fund (PIF) is reportedly in active negotiations to invest a substantial sum of no less than $250 million in Human Horizons Group, a prominent Chinese electric vehicle manufacturer. This potential investment serves a strategic purpose, aligning with the kingdom’s ambitions to foster a thriving domestic automotive sector. The PIF’s intention is to secure a stake in the Shanghai-based company, and preliminary discussions suggest a potential valuation of the company at $3 billion. While the prospect of an agreement by the end of the year exists, finalising the terms may extend the timeline, indicating that no definitive determinations have been reached at this stage.

Human Horizons Group, in a bid to fortify its expansion efforts, is contemplating raising up to $1 billion from private investors. Additionally, the company is actively exploring the possibility of initiating an initial public offering (IPO) with the assistance of financial institutions UBS Group and Morgan Stanley.

Saudi Arabia’s potential investment in Human Horizons aligns with a broader economic strategy to reduce its dependence on oil and diversify its economy. The kingdom has been actively forging partnerships and investments in the electric vehicle sector, underlining its commitment to this transformation.

This potential investment also solidifies Saudi Arabia’s connection with China. Chinese business leaders have shown increasing interest in seeking investment opportunities in the Gulf region, particularly after President Xi Jinping’s visit to the kingdom in December. They are increasingly inclined to participate in Vision 2030, Saudi Arabia’s comprehensive economic transformation plan.

Moreover, the Saudi government has been making significant strides in the electric vehicle sector. A notable $5.6 billion deal with Human Horizons has been inked, signifying the kingdom’s commitment to fostering this industry. Moreover, Saudi Arabia has approved the establishment of a manufacturing facility for its domestic EV brand, Ceer, and has inaugurated another facility in collaboration with California-based Lucid Group (NASDAQ: LCID). These endeavours are pivotal in the kingdom’s journey towards economic diversification.

In another promising development, Hyundai Motor (OTC: HYMTF) Co. has reached an agreement to establish a car assembly plant near Jeddah, marking a partnership with the PIF. These strategic alliances and investments underscore Saudi Arabia’s dedication to propelling its automotive sector into the future.