In the heart of the Middle East, Saudi Arabia emerges as a pivotal player in the world of electric motorsport, showcasing remarkable investment opportunities that are capturing global attention. The Kingdom’s Public Investment Fund (PIF), with its colossal asset base of approximately US$776 billion, is leading the charge towards a sustainable future through significant stakes in major electric racing series.
The Power of PIF in Electric Motorsport
Saudi Arabia’s PIF has strategically acquired a substantial shareholding in Formula E, a prominent Hong Kong-based electric racing series. With a 5.5% stake in B-preferred shares and 9.6% in ordinary shares, valued at €6.3 million (US$6.9 million), the fund is solidifying its influence in this dynamic industry. This investment aligns with the Kingdom’s vision of sustainability and innovation, further strengthened by partnerships with key players like Sabic and Saudia, a state-owned airline.
Formula E’s CEO, Jeff Dodds, recognizes Saudi Arabia as a valuable partner, expressing openness to future collaborations that enhance the series’ sustainability efforts. This partnership is crucial as Formula E navigates financial challenges, including a reported €65 million (US$70.8 million) loss in the last fiscal year.
Expanding Horizons: Extreme E and E1 Series
Beyond Formula E, Saudi Arabia’s PIF extends its reach into Extreme E and the E1 Series. In Extreme E, the fund holds a commanding 55% of the preferred A ordinary shares, valued at approximately €50 million (US$54.5 million). PIF also possesses half of the shares in the E1 Series, underscoring its commitment to sustainable motorsport innovation.
Saudi Arabia’s involvement transcends mere investment, with the Kingdom hosting significant events like the Formula E races since 2018, the Dakar Rally since 2020, and the opening race of the Extreme E season since 2021. The upcoming debut of the E1 Series further cements Saudi Arabia’s position as a motorsport hub. Additionally, a memorandum of understanding with Dorna Sports anticipates the future hosting of a MotoGP race, highlighting the Kingdom’s expanding motorsport portfolio.
A Strategic Vision for the Future
While speculation swirled around a potential US$20 billion bid for Formula One, Saudi Arabia’s primary focus remains on its ten-year, US$650 million agreement for the Saudi Arabian Grand Prix and Aramco’s partnership with Formula One. The Kingdom’s strategic investments align with its broader objectives of sustainability and technological advancement, exemplified by the Neom smart city initiative.
Neom, entirely owned by PIF, partners with McLaren’s Formula E and Extreme E teams, positioning itself as a hub for cutting-edge hydrogen power technology. As Extreme E transitions to Extreme H, this partnership is expected to drive further innovation in green hydrogen, leveraging Neom’s upcoming world-leading hydrogen facility.
Saudi Arabia’s proactive investments and strategic partnerships in electric motorsport are not only transforming the industry but also positioning the Kingdom as a global leader in sustainable innovation. The opportunities for foreign investors are vast, offering a chance to be part of Saudi Arabia’s ambitious journey towards a greener future.
