Hyundai, Red Sea Global agree on EV, AAM projects in Saudi luxury resorts

South Korea’s top automaker Hyundai Motor Group said on Monday it has agreed with Saudi Arabia’s state-sponsored developer Red Sea Global (RSG) to cooperate in the Middle Eastern country’s push for electrification and other eco-friendly future mobility projects.

Under a memorandum of understanding signed in Riyadh on Sunday, the two companies agreed to work together to test Hyundai Motor Co.'s electric vehicles and hydrogen-powered cars in the resort complex on the Ummahat Islands and the ultra-luxury Amaala tourist resort on the northwest coast – two mega tourist projects under development by RSG.

The partners will also collaborate in RSG’s introduction of advanced air mobility (AAM) systems and autonomous vehicles into its resort and tourist areas across Saudi Arabia, the world’s largest oil producer.

The initial agreement was signed by Lee Dong-gun, vice president of the Future Growth Strategy Sub-Division at Hyundai’s Global Strategy Office, and John Pagano, chief executive of RSG.

RSG, owned by the Public Investment Fund (PIF), the Saudi sovereign wealth fund, is also the name of Saudi Arabia’s five Giga Projects being developed under the country’s Vision 2030 launched in 2016 to break away from its crude oil-centered economic structure and pursue a long-term eco-friendly growth strategy.

The five Giga Projects are Neom, the construction of a smart city; Qiddiya, the construction of an entertainment complex; Roshn, the development of a new housing facility; Diriyah, the development of historic sites; and RSG, the development of a luxury resort and tourism project.

“This MOU will pave the way for our continued cooperation with RSG in various business sectors,” said Hyundai’s Lee.

RSG CEO Pagano said: “Hyundai Motor Group is a world leader in sustainable luxury mobility. Through Hyundai’s cutting-edge technology and eco-friendly mobility solutions, we are meeting customers’ expectations for style, comfort and environmental responsibility. At the same time, we’re getting one step closer to carbon neutrality.”

HYUNDAI’S INTEREST IN SAUDI ARABIA

Saudi Arabia is Hyundai Motor Group’s strategic hub for its business across the Middle East.

Last October, Hyundai Chairman Chung Euisun signed a $500 million deal with the PIF, the Saudi sovereign fund, to jointly build a car plant in King Abdullah Economic City (KAEC).

The plant, Hyundai’s first EV production site in the Middle East, is expected to serve as its gateway to the region and North Africa.

The factory will also serve Hyundai and its sibling Kia Corp.'s ambition to sell 55,000 cars annually in the Middle East by 2030 to control 20% of the regional market with their EV lineup.

In Saudia Arabia alone, Hyundai and Kia control about a fifth of its car market as the No. 2 car seller after Japan’s Toyota Motor.

SAUDI ARABIA’S AMBITIONS

Saudi Arabia aggressively seeks to roll out electric cars nationwide in preparation for the post-oil era.

Mohammed bin Salman, the Saudi crown prince and prime minister, has vowed to turn a third of all cars running in the Kingdom’s capital city of Riyadh into electric vehicles by 2030.

The $500 billion Neom project he is leading is to build a smart city to be fully run on renewable energy such as solar power and green hydrogen as well as cutting-edge technologies, including 5G networks, the Internet of Things, cloud computing and robotics, in a desert area in the kingdom's northern Tabuk Province.

In November 2022, the Saudi crown prince, dubbed “Mr. Everything” for his astronomical wealth and many business portfolios, visited Seoul to discuss business cooperation with Korean companies.

During his stay in Seoul, the Saudi leader clinched several deals worth a combined $30 billion with Korean companies.

Write to Nan-Sae Bin at binthere@hankyung.com

In-Soo Nam edited this article.