Saudi Public Investment Fund’s Strategic Move into Chinese EV Market
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is reportedly negotiating a substantial investment in the Chinese electric vehicle (EV) sector. This move, involving at least $250 million, targets Human Horizons Group Inc., a Shanghai-based EV manufacturer known for innovation and growth in the automotive industry.
Valuation and Growth Prospects
The deal, which may value Human Horizons at around $3 billion, reflects the kingdom’s broader vision to create a robust domestic auto industry. While final terms are yet to be cemented, the agreement could be finalized within the year. Human Horizons is concurrently considering a $1 billion private investment drive to propel its growth and has been in discussions regarding an initial public offering, advised by financial giants like UBS Group AG and Morgan Stanley.
Thrust for Diversification
This investment by the PIF is part of a series of strategic deals aimed at diversifying Saudi Arabia’s economy, traditionally dependent on oil. The potential investment aligns with previous deals, such as the $5.6 billion agreement with Human Horizons, whose high-end HiPhi sport utility vehicles command premium prices. The PIF has also supported the development of Ceer, a domestic EV brand, and partnered with international firms like Lucid Group Inc. and Hyundai Motor Co. to establish manufacturing plants within the kingdom.
Deepening Sino-Saudi Relations
A deal with Human Horizons could link Saudi Arabia and China closer. China is Saudi Arabia’s top trade ally. President Xi Jinping’s trip boosted this bond. After his visit, Chinese companies started to work more with Gulf investors. They are also supporting Vision 2030, Saudi Arabia’s big economic plan.
Chinese EV Makers on the Rise
The interest in Human Horizons comes at a time when Chinese EV manufacturers are making significant strides in global markets. Companies are growing fast. Firms like BYD, Nio Inc., and SAIC Motor Corp. are expanding. The sector is seeing big investments. Stellantis NV put $1.1 billion into Zhejiang Leapmotor Technology Ltd. Volkswagen AG invested $700 million in Xpeng Inc.
Related Topics:
Saudi Public Investment Fund’s Strategic Move into Chinese EV Market
Public Investment Fund to Develop Historic Jeddah
Crown Prince transfers 4% of Saudi Aramco’s shares to Public Investment Fund
