Spotlight: Industrial Sector Receives Significant Boost with Launch of Tesla’s New Hub and Incentive Program
This article explains why expanding to Saudi Arabia represents a significant opportunity for companies in the industrial IT and digital transformation fields.
Saudi Arabia's non-oil industrial sector is poised for substantial growth, targeting a contribution of $377.06 billion by 2035 and the creation of 2.1 million jobs by 2030.
These objectives are establishing a strategic pipeline for the Kingdom’s sustained economic development, simultaneously offering global players lucrative pathways to growth.
This roundup presents the latest developments in the industrial sector, which continues to be a target of major global players, such as Tesla.
Saudi Arabia Launches Second Round of Industrial Incentives Worth Up to $13.5 Million Per Project
Following the successful launch of the first program in January, the Ministry of Industry and Mineral Resources, in partnership with the Ministry of Investment, has unveiled the second set of standard incentives for the industrial sector.
What does it offer?
Investors can access support equivalent to up to 35% of a project’s initial investment, capped at $13.5 million (SAR 50 million) per project. These incentives are distributed evenly across the construction and production phases and are available for over seven years.
While the first set of incentives targeted the downstream chemicals, automotive, and machinery sectors, this second phase expands to additional industries. It specifically aims to attract companies that produce critical goods currently imported and not yet manufactured locally.
Digital Transformation to Boost Industrial Productivity by Up to 25%
At the Saudi Industry Forum in Dhahran, Aramco's President and CEO, Amin Nasser, forecasted a 15% to 25% increase in industrial output through digital transformation alone.
Aramco is actively driving this shift with concrete actions, including the launch of Aramco Digital Company and a 450 MHz private wireless network dedicated to industrial use.
Aramco's broader digital infrastructure investments also include the establishment of Cyberani in 2021, a company providing industrial-grade cybersecurity solutions and software protection technologies. The company is further developing artificial intelligence platforms, data centers, and smart industrial complexes as part of its comprehensive digital transformation approach.
The increasing need for digitization in the industrial sector presents attractive entry points for global companies. This makes the move to set up a business in Saudi Arabia a strategic imperative for enterprises seeking to capture a first-mover advantage in this dynamic market.
Tesla Opens First Saudi Arabia Center, with Cybertruck Deliveries Starting End-2025
The opening of Tesla’s first center in Riyadh marks a significant step forward in the Kingdom’s plans to produce 600,000 EVs annually. This move reflects both a surge in EV adoption in Saudi Arabia and its positioning as a gateway for premium automotive technology entering the Middle East.
Tesla plans to introduce Model 3 and New Model Y vehicles, addressing a critical concern for early adopters by providing reliable after-sales support in an emerging market. Perhaps most notably, Tesla has chosen Saudi Arabia as the first region outside North America to receive Cybertruck deliveries, expected by the end of 2025.
Tesla’s hub launch will significantly boost Saudi manufacturing capacity, crucial for transforming 30% of all cars in Riyadh to electric by 2030.
