Oman Signs $250 Million Deal to Build EV and Battery Hub

Oman is making a fresh push into the electric vehicle sector after signing a $250 million agreement with South Korean company EL B&T to establish an EV and battery cell manufacturing project in the Special Economic Zone at Duqm (SEZAD), as Gulf states accelerate efforts to diversify beyond oil revenues and position themselves within emerging industrial supply chains.

The agreement was signed between Oman’s Public Authority for Special Economic Zones and Free Zones (OPAZ) and Korean EV technology company EL B&T. The project carries an investment value of approximately $250 million (RO 96.2 million).

Under the agreement, the project will be developed in two phases, eventually reaching an annual production capacity of 60,000 electric vehicles and 1.6 million battery cells after the completion of the second phase.

The signing ceremony was led by Qais Mohammed Al Yousef, chairman of OPAZ, and Dr. Young Ill Kim, chairman of EL B&T.

Oman’s Push into Full-Scale EV Manufacturing

The investment marks one of the more significant industrial EV announcements in Oman in recent years and reflects a broader regional trend as Gulf economies seek to establish manufacturing capacity tied to clean mobility technologies, battery supply chains, and advanced industrial production.

Unlike some earlier Gulf EV announcements that focused largely on assembly operations or pilot-scale manufacturing, the Duqm project combines vehicle production with battery cell manufacturing, potentially giving Oman a stronger foothold in a segment of the market considered strategically important for long-term industrial competitiveness.

Phase I will span roughly 467,000 square meters, while an additional 429,000 square meters is expected to be reserved for the second phase of expansion.

The development is expected to initially target Oman’s domestic market before expanding toward regional exports across the GCC, Middle East, and North Africa, according to the Oman News Agency report.

Duqm’s Expanding Industrial Role

Duqm has increasingly become central to Oman’s economic diversification ambitions. The coastal economic zone has been positioned as a strategic logistics and industrial hub connecting trade routes across Asia, Africa, and the Middle East. Authorities have spent years attempting to attract heavy industry, logistics infrastructure, petrochemicals, hydrogen projects, and advanced manufacturing into the zone.

The EV and battery project could also strengthen Duqm’s broader industrial ecosystem by encouraging suppliers and related manufacturers to establish operations nearby, particularly businesses tied to battery components, vehicle systems, and supporting infrastructure.

That ecosystem effect is becoming increasingly important as countries compete not only for vehicle production but also for the wider supply chains surrounding electric transportation. Battery manufacturing in particular has become a critical area of competition globally because of its importance to EV costs, energy storage, and industrial resilience.

The project comes as regional governments intensify investments in renewable energy, clean transportation, and industrial localization strategies. Saudi Arabia, the UAE, and Oman have all announced initiatives aimed at building domestic EV capabilities and attracting foreign manufacturers to special economic zones.

While Gulf economies remain heavily connected to hydrocarbons, governments across the region are increasingly attempting to balance energy export revenues with investments in future-facing industries that could provide long-term employment and manufacturing growth.

The agreement with EL B&T also highlights growing economic cooperation between Gulf states and Asian industrial companies, particularly in sectors tied to energy transition technologies.

Although few operational details about EL B&T’s manufacturing timeline have been publicly disclosed, regional reporting suggests the company plans to move toward commercial production in the coming years as infrastructure development progresses inside SEZAD.

The scale of the planned production capacity signals that Oman is aiming beyond symbolic investment announcements and is attempting to establish a more substantive manufacturing position within the regional EV market.