In a strategic move reflecting a radical shift in the global supply chains of the electric vehicle industry, Lucid CEO Mark Winterhoff announced the company's decision to significantly reduce its reliance on Chinese suppliers, with plans to completely halt magnet imports from China by 2026. This move comes as part of the company's strategy to strengthen its partnerships with Saudi Arabia, leveraging the Kingdom's vast natural resources in the mining sector.
Strategic partnership with Maaden and MP Materials
In an interview with the American news website Semaphore, Winterhoff explained that the strategic alternative to Chinese imports will be reliance on products from a new rare earth mineral processing plant. This plant is the result of a joint venture between the Saudi Arabian Mining Company (Ma'aden) and the American company MP Materials, which enjoys US government support. The collaboration aims to establish a comprehensive and flexible supply chain for rare earth minerals within the Kingdom, thereby mitigating the geopolitical risks associated with dependence on a single source of supply.
Localizing industry and supporting Vision 2030
Lucid Motors, in which Saudi Arabia’s Public Investment Fund owns more than 60% of the shares, is seeking to deepen its roots in the Saudi market not only as a sales hub but also as a major manufacturing base. The CEO indicated that the company is working diligently to source its spare parts and essential components from within the Kingdom. These efforts coincide with the company’s intensive preparations to begin production of its mid-size electric vehicle at its state-of-the-art factory in Jeddah (western Saudi Arabia) by the end of this year, further solidifying the Kingdom’s position as a regional center for the electric vehicle industry.
Economic and geopolitical importance
This shift carries profound economic implications that extend beyond simply changing suppliers; it aligns with the goals of Saudi Vision 2030, which focuses on diversifying the economy and reducing dependence on oil. Mineral resources are considered the third pillar of Saudi industry, with the Kingdom estimating its untapped mineral wealth at over $2.1 trillion and working diligently to extract and process these minerals locally to maximize added value.
Internationally, this trend is part of a broader global movement to secure supply chains for critical minerals needed for the energy transition, moving away from the traditional dominance of certain Asian markets. By leveraging Saudi Arabia’s rare earth minerals, Lucid ensures the sustainability of its production operations while simultaneously contributing to the development of an advanced industrial ecosystem within the Kingdom.
