Saudi sovereign fund invests $1bn in United States electric vehicle firm

Daniel Fowler
September 18, 2018

USA electric auto start-up and wannabe Tesla rival, Lucid Motors, has secured the huge $US1 billion investment agreement with the Saudi Arabian Public Investment Fund in another sign electric cars are the future.

The infusion represents a coup for Lucid Motors, a Newark, California, startup whose leadership includes six former Tesla executives, including an engineer who oversaw the design of the Tesla Model S that proved electric cars could be esthetically pleasing and fast, in addition to reducing air pollution.

The money is critical for Lucid Motors as their electric vehicle plans are already behind schedule. The investment comes after reports that the fund has also built a near 5 per cent stake in Tesla, worth about $2.5 billion. This came after Tesla CEO Elon Musk indicated the PIF had shown interest in taking his firm private. Musk later said the Saudi Arabia's Public Investment Fund would be investing in the firm, something Saudi officials never comment on.

The funding, which will be made through a special-purpose vehicle wholly owned by PIF, will be used by Lucid to complete development and testing of the Lucid Air, construct a factory in Arizona and start up production of the auto.

The vehicle will have a battery range of 240 miles to 400 miles per charge, depending on what kind of extras are ordered.

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Like all high-end electric cars, the Lucid Air will be powerful, with 1,000 horsepower from its dual motors. "Our investment in Lucid is a strong example of these objectives".

"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.

Musk said in a blog post on August 13 he had "no question" that the Saudis would finance such a transaction following a July 31 meeting. The kingdom is accelerating its investment in renewables to decrease its own reliance on oil for electricity, and presumably now seeing investing in electric vehicles as another means to diversify away from its dependence on oil.

But analysts have offered far lower valuations for Aramco and multiple delays have struck the project since.

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