Oil giant Saudi Aramco and the Chinese electric vehicle maker BYD announced Monday they agreed to explore closer collaboration in new-energy vehicle technologies.
The Saudi firm is already a partner with Renault of France and the Chinese automaker Geely in a joint venture to produce thermal engines.
Its subsidiary Saudi Aramco Technologies Company (SATC) is now teaming up with the Chinese EV and hybrid vehicle giant, although terms of the accord were not specified.
In a joint statement the companies said the deal aimed to "foster the development of innovative technologies that enhance efficiency and environmental performance."
The statement was issued ahead of Auto Shanghai, the world's largest industry show of its kind, which opens Wednesday.
Saudi Aramco, the world's largest producer of oil, "is exploring a number of ways to potentially optimize transport efficiency, from innovative lower-carbon fuels to advanced powertrain concepts," said Ali A. Al-Meshari, its senior vice president of Technology Oversight and Coordination.
Luo Hongbin, BYD senior vice president, said "SATC and our cutting-edge R&D capabilities in new energy vehicles will break the boundaries of geography and mindset to incubate solutions that combine highly-efficient performance with a lower carbon footprint."
Saudi Arabia is working to diversify its economy, which is dependent on oil export revenue, and wants to set up 5,000 EV charging stations by 2030.
The Saudi sovereign wealth fund holds a 60% stake in the California luxury EV maker Lucid and has signed an agreement with Hyundai of South Korea to build an electric and thermal vehicle factory in Saudi Arabia.
A Saudi EV brand called CEER, launched in 2022, is expected to begin production this year.
Last year BYD opened a showroom in Riyadh to market electric cars at affordable prices in a country where gasoline is cheap and EV charging stations are rare.
Tesla also opened its first showrooms in Saudi Arabia on April 10.
