First Tesla. Now Lucid. Saudi Arabia’s Pension Investment Fund (PIF)—the Kingdom’s sovereign wealth fund—is gunning for electric vehicle glory, but it’s dipping its fingers in multiple pies.
On Monday, Lucid Motors managed to close a $1-billion deal with Saudi Arabia to fund the 2020 commercial launch of its first EV, the Lucid Air.
It’s a pretty big deal for an electric car startup company. It’s also a pretty big deal for a company that is hoping to compete with Tesla, which has also seen the Saudi SWF buy 5 percent of the company’s stock, even if it ducked out of helping Elon Musk take Tesla private. And it is lost on no one that Lucid’s chief technology officer, Peter Rawlinson, is a former Tesla exec.
Tesla stock certainly didn’t benefit from news of the Lucid deal, losing 2 percent in early trading Tuesday, before regaining 1.25 percent by 9:50am EST:
(Click to enlarge)
Only last year, Lucid was floundering because it couldn’t secure the funding it needed to launch its commercial luxury line.
Owned by Atieva, the Lucid Air has hit some major production snags, unable—until now—to pull the money together to build its planned $700-million factory in Arizona. And we’ve haven’t heard much from them since last summer, when rumors briefly circulated that Ford might buy them out. Related: Is A Four-Day Workweek Feasible?
The silence has not been broken, and the pain has subsided--and Lucid fancies itself a new pioneer of sorts, now emboldened by Saudi funding.
“The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized,” Rawlinson said in a statement. “This is inhibiting the pace at which sustainable mobility and energy are adopted. At Lucid, we will demonstrate the full potential of the electric connected vehicle in order to push the industry forward.”
And there was a challenge to other EV manufacturers, too:
"I believe that no one has truly yet exploited the full benefits of electrification," he said on Quest Means Business on CNN. "It gives so much space for more comfort and luxury."
The Saudi infusion will enable Lucid to complete development and testing of the Lucid Air as well as build its new factory and start its North American retail strategy. Manufacturing should begin in 2020, if all goes as planned.
Related: This Millennial Brokerage Is Coming To Tesla’s Rescue
“Our efforts to date have been based on proof of concept,” said Derek Jenkins, head of design at Lucid. “Going forward, this will enable us to mature our supply chain, kicking off long lead times on tooling. We can ramp up hiring and build out our plans for retail customer experience centers in major cities.”
The base Lucid Air will cost around between $52,000 and $100,000 and have a 1,000-horsepower capability from dual motors, with a 400-mile range on a full charge, compared to Tesla’s 300-mile range.
The Saudi PIF, for its part, views the EV segment as a long-term investment, and it plans to be positioned at the top.
The Saudi investment is not directly attached to the PIF; rather, it is a special-purpose vehicle wholly owned by the PIF.
By Tom Kool for Safehaven.com
More Top Reads From Safehaven.com