Saudi wealth fund plunges $1bn into Tesla rival Lucid

Lloyd Doyle
September 18, 2018

Saudi Arabia on Monday announced it has signed off on a US$1 billion investment in U.S. carmaker Lucid Motors with the aim of helping the Tesla rival roll out electric cars.

Lucid Motors first teased its forthcoming electric luxury sedan, the Air, in 2016.

The investment, which still needs approval from relevant authorities, will pave the way for Lucid Motors to launch its first electric vehicle in 2020. Lucid joins Daimler-owned (DAIGn.DE) Mercedes, BMW (BMWG.DE) and Volkswagen's (VOWG_p.DE) Audi and Porsche divisions in the battle for dominance in the market for premium battery cars.

It will now be able to build its factory in Arizona, complete engineering development and testing of its Lucid Air vehicle and begin the "global rollout of its retail strategy", it said.

Tesla shares dropped some 1.9% in NY on Monday.

The Lucid Air is very much a luxury vehicle in the mould of Tesla
The Lucid Air is very much a luxury vehicle in the mould of Tesla

The PIF's Lucid investment comes a little more than a month after Tesla CEO Elon Musk tweeted that he had "funding secured" to take the company private at $420 per share.

In a statement, a spokesperson for Saudi Arabia's sovereign wealth fund said "This investment in the electric vehicle industry, which is now experiencing rapid growth, is an added value to the Fund's portfolio which aims to achieve long-term, growing returns".

"The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized", said Peter Rawlinson, chief technology officer of Lucid.

"By investing in the rapidly expanding electric vehicle market, PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development and driving revenue and sectoral diversification for the Kingdom of Saudi Arabia", according to the PIF statement.

Based in Newark, California, Lucid Motors was founded in 2007 as Atieva by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former executive at Oracle Corp. and Redback Networks. It did not say how it would use the money, only describing it as going toward "general corporate purposes".

Other reports by Iphone Fresh

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