Enovate Motors, a Chinese electric vehicle (EV) startup, plans to build an EV factory in Saudi Arabia with an annual capacity of 100,000 cars.
The carmaker, which counts Shanghai Electric Group as an early investor, signed an agreement with Saudi Arabian authorities and joint-venture partner Sumou to set up an EV plant. The factory, which will include a research and development center, will cost about US$500 million, Enovate said.
The MoU between Saudi Arabia’s Sumou and China-based Enovate was among the agreements signed during Chinese President Xi Jinping’s visit to the Arab country between December 7 and 10 to strengthen strategic partnerships between the two countries. Arab powerhouse Saudi Arabia and economic giant China signed as many as 34 agreements in green energy, information technology, cloud services, transport, logistics, housing, and medical.
Enovate currently sells two models – the ME5, an extended-range compact SUV starting from 138,800 yuan ($19,886), and ME7, a pure electric medium-sized SUV starting from 238,800 yuan ($34,212).
Chinese EV companies have been actively looking to expand operations in the international market which will help improve manufacturing capabilities.
and hydrogen fuel cell vehicles
China leads the world EV market
China is the world’s largest EV market where three out of every five new cars are expected to be powered by batteries in 2030, according to a UBS forecast last year.
Years of government policies and subsidies encouraged sales of environmentally-friendly vehicles in China. The sales of new-energy vehicles (NEVs) in China, which include battery-powered cars and plug-in gasoline-electric hybrids, doubled in a year in the first 11 months of 2022 to more than 6 million units, according to China Association of Automobile Manufacturers.
Chinese EV companies: Some of the major Chinese EV automakers include BYD, Nio, Xpeng, Geely’s EV brand Zeekr, and Volkswagen’s Chinese partner SAIC. Tech giants like Tencent, Huawei, Baidu, and Didi Chuxing working with automakers on car technology such as software.
Impact of end of subsidies: Chinese EV buyers enjoyed a discount of between 4,800 yuan ($695) and 12,600 yuan even after a 30% cut in subsidies in 2022. However, analysts have projected slower EV sales in the coming months as subsidies are set to phase out after 12 years.
EV makers have already started passing soaring costs to consumers citing the impact of reduced subsidies for new energy vehicles. Leading Chinese electric car manufacturer BYD has adjusted its prices, reporting an increase of between 2,000 yuan ($290) and 6,000 yuan ($870) for various models. Most BYD models are priced between 100,000 to 200,000 yuan (US$14,000 to 29,000).
(This story has been updated on January 3, 2023, to reflect the new figures).
