Saudi explores potential $250 million investment in Chinese automotive market

PIF contemplates $3 billion purchase of Shanghai-based Human Horizons

Insiders in the know have revealed that the Saudi sovereign wealth fund, the Public Investment Fund (PIF), is currently engaged in talks to invest a minimum of $250 million in the Chinese electric car maker, Human Horizons. This strategic move is regarded as a crucial step by Saudi in its pursuit of creating a thriving domestic car industry, according to a Bloomberg report.

$3 billion

Sources that have chosen anonymity due to the confidential nature of the discussions, have revealed that PIF is contemplating the acquisition of Human Horizons, a Shanghai-based company valued at $3 billion. These sources have also indicated that there is a possibility of reaching an agreement within the current year; however, the finalization of the terms may lead to a longer timeline.It is crucial to note that no definitive decisions have been made at this stage.

Sources have revealed that Human Horizons is currently exploring strategic options and is considering raising up to $1 billion from private investors to support its growth initiatives.

Bloomberg has reported that Human Horizons is actively collaborating with UBS Group and Morgan Stanley to assess the possibility of pursuing an initial public offering (IPO).

According to their respective representatives, both the PIF and Human Horizons have declined to comment on the matter.

Investment in Saudi’s automotive sector

As part of the Kingdom’s efforts to diversify its economy beyond oil, PIF’s potential investment would be in line with a string of deals announced in the sector. Particularly noteworthy is a substantial $5.6 billion agreement with Human Horizons, a renowned manufacturer of high-performance sports cars like the HiPhi, which can command prices of up to 800,000 yuan ($126,000).

This year, Saudi has demonstrated remarkable progress in the electric vehicle (EV) sector. Notably, it has granted approval for the establishment of a manufacturing plant dedicated to its domestic EV brand, Ceer. Furthermore, a collaborative plant with Lucid, a company based in California, has been successfully inaugurated. Additionally, Hyundai has recently forged a partnership with PIF to jointly develop a car assembly plant in close proximity to Jeddah. These notable endeavors exemplify the Kingdom’s steadfast commitment to expanding its influence within the EV industry.

Strengthening Saudi-Chinese relations

The partnership agreement with Human Horizons further demonstrates Saudi’s commitment to strengthening its relationship with China, which happens to be its largest trading partner. The visit of Chinese President Xi Jinping to the Kingdom in December played a crucial role in fostering these ties. As a result, Chinese executives have been actively encouraged to explore investment opportunities in the Gulf region that align with the objectives set forth in Vision 2030.

Source: economymiddleeast

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