Posted on 23 Oct 2025
Saudi Arabia aims to become an electric vehicle (EV) production hub in the next decade. Work is underway to secure domestic automotive steel production, but obstacles exist to achieving its goal of localising the majority of components procurement, panellists said at last week’s Saudi International Iron and Steel Conference in Riyadh.
Saudi Arabia has 340,000 vehicles/year of EV automotive production capacity in the pipeline and is looking to become a regional automotive hub by 2035-2040.
One major producer in the kingdom will be Ceer Motors, which plans to start production at the end of 2026 and reach 150,000 vehicles/year after 2031.
The lack of domestic electrical steel production to feed manufacturing of motors for EVs spurred Wahaj for Industry to invest in the Ras Al Khair electrical steel plant joint venture with Slovenian Steel Group (SIJ), Wahaj vice chairman Iztok Seljak said at the event for which Kallanish was programme partner.
The entire upstream and downstream operations will be in one place, “starting literally with iron ore and DRI and then into our electric arc furnace, continuous slab casting and hot and cold rolling and annealing, integrated with the stamping companies and electric motor assembly companies in literally the line of 3-4km, which is unique in the world,” he noted.
“The whole idea of getting the automotive industry into the country [Saudi Arabia] is to support the whole Vision 2030 which means that … there was a very strong emphasis on localisation, and our plan is to localise every large part,” said Ceer Motors chief procurement officer Johnny Saldanha. Some 45% of components are to be localised in value terms and 80% in volume terms.
Ceer will need some 80,000 tonnes/year of automotive grade steel, mainly hot-dip galvanized sheet. “Right now we are working with overseas suppliers or steel companies, as there is no automotive grade steel available in the country, but I think we are very closely working, and we will have some more discussion today to see with their [authorities’] plans in KSA when we can switch over and buy automotive grade steels from them [local suppliers]. So our whole idea is you can't create an automotive industry cluster unless you have a very deep and wide localisation, and it starts with raw material,” Saldanha noted.
However, there are challenges for manufacturers to localise production in Saudi Arabia. The financial support available for industries is not clear in national programmes and the training of the workforce to attain the right level of specialisation is insufficient, said SNAM Automotive Manufacturing Co. chief executive Fahd Al-Dohish.
For automotive suppliers, “all the challenges delay the attractiveness and willingness to come to Saudi Arabia,” he continued. A solution is currently being worked on together with the industry ministry, he added.
Asked about how Saudi’s nascent carmakers can compete against China’s growing dominance of the electric vehicle market, National Industrial Development Corporation (NIDC) chief advisor automotive Aftab Ahmed noted: “It's a … real challenge for our local manufacturers. And we are also looking at how we can protect this challenge, because we don't have that kind of scale [as Chinese carmakers]. So the scale is a very key thing for automotive and scale gives you the optimal cost. So we are looking at all the policies [to support the local automotive supply chain].”
Source:Kallanish
