Ceer’s EV gamble meets China’s price war

The images are moody, geometric and faintly Blade Runner – fitting for a tech launch.

Earlier this week, Ceer CEO Jim DeLuca unveiled the Exobot sedan and sports utility vehicle, the first two models in what is intended to be a seven-strong line-up from Saudi Arabia’s first home-grown car maker.

The ambitions are sizeable. We are told the wedge-shaped, gull-winged sedan will sprint from 0 to 100 kilometres per hour in a little over two seconds.

The broader aim is to localise 45 percent of materials and parts by 2034 and to produce up to 240,000 electric vehicles annually.

But at first glance, the timing looks inauspicious. Chinese EV and hybrid makers such as BYD and Chery are subsidised and highly efficient, and are causing massive disruption to established European, Japanese and US manufacturers such as VW, Nissan and Stellantis. The Middle East is not immune. Last year, Chinese brands accounted for 12 percent of new vehicle sales in Saudi Arabia, according to AutoData.

The kingdom’s investment in California-based Lucid, another EV maker with a plant under construction near Jeddah, has been fraught – to put it mildly. In the background, big issues are playing out in the Strait of Hormuz and in the Bab al-Mandab down the Tihama coast from King Abdullah Economic City, where the Ceer plant is located.

The company has, however, chosen its partners wisely. Ceer is a joint venture between the kingdom’s sovereign Public Investment Fund (PIF) and Taiwanese giant Foxconn, best known for assembling Apple smartphones. Foxconn is now intent on diversification and has 50 percent of the Jeddah-based venture. Hyundai Transys of South Korea is supplying drive systems, while BMW of Germany is a component technology provider.

Moreover, EVs are gaining ground in the region – despite concerns that batteries perform less well in the harsh Gulf summers and the low penetration of charging stations.

In the GCC, EVs accounted for 4 percent of vehicle sales in 2024, according to Roland Berger, the consultants.

In the same year, there were more than 11,000 EV sales in Saudi Arabia – more than 10 times the figure in 2023, the consultants said.

Policy is also supportive. The kingdom has designated that 30 percent of vehicles in Riyadh, the capital, be electric by 2030. The PIF-backed Saudi Electricity Company said in 2023 that it planned to install more than 5,000 fast chargers by 2030.

Further reading:

• Saudi Arabia’s EV ambitions face ‘chicken and egg’ dilemma
• China’s BYD plans Saudi expansion in EV race
• PIF-backed Lucid unveils $1.4bn cost cuts as losses deepen

DeLuca said at the launch of the Exobot: “This is the moment that a new industry came to life” – but this is early days. To be sure, Ceer has hit the first of its targets, and EVs are less complicated to build than conventionally fuelled vehicles.

The Saudi government will have to decide what tariff protection – if any – it offers Ceer and its fellow car makers.

Currently, EV manufacturing in the developed world exists only behind tariff walls. In 2024, the EU imposed anti-subsidy tariffs on Chinese EVs of up to 45 percent, while the US adds 100 percent.

If similar protection in the kingdom is set too high, consumers will end up with substandard, expensive cars – and a loss-making company. Too low and everyone buys a Chinese model. Ceer, for its part, will have to be creative with its range and pricing. The Chinese competition is formidable.