Hyundai Motor has agreed to a partnership with Saudi Arabia’s sovereign wealth fundThe Public Investment Fund (PIF) struck a deal to invest more than $500 million in a car assembly plant, joining electric car maker Lucid Motors Inc. in making vehicles in the oil-rich kingdom.

Park Ji-woo, head of Hyundai Motor's external group, said Hyundai Motor plans to build a factory with an annual output of 50,000 vehicles in King Abdullah Economic City near Jeddah. She said the plant would beA joint venture between PIF and Hyundai Motor, the former will hold 70% of the Saudi joint venture and the latter will own the remaining shares.

The assembly plant will begin operations in early 2026 and produce electric and internal combustion engine vehicles and is expected to occupy approximately 300,000 square meters (3.2 million square feet).

The kingdom's wealth fund PIF confirmed the joint venture in a statement and said the new factory "will create thousands of jobs and allow the transfer of knowledge and expertise."

Developing a domestic auto industry centered in Jeddah is part of Saudi Crown Prince Mohammed bin Salman's plan to diversify the country's oil-dependent economy. The plan is led by PIF, which invested in US electric vehicle startup Lucid and allowed the latter to build its first international factory in Saudi Arabia.

It has also created its own electric vehicle brand, Ceer, and is investing internationally and domestically to secure the metals and minerals it needs to develop supply chains for the industry.