Nascent EV maker Lucid Motors is in the ramp up phase of production at its plant near Phoenix, Arizona, but it’s got at least one eye on the future, reaching new deals with Saudi Arabia that will pave the way for production in the kingdom.
The company revealed Tuesday it’s signed agreements with the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development fund and the Economic City at King Abdullah Economic City to as it “lays the groundwork” to produce vehicles in the Middle East.
“Lucid aspires to be a catalyst for change wherever we go, so it makes perfect sense that we are bringing electric vehicles to one of the world’s biggest oil producing nations,” said Peter Rawlinson, CEO and CTO, Lucid Group, in a statement. The facility will essentially assemble vehicles from “kits” shipped from the company’s plant in Arizona.
Plans for the plant
“Establishing a global manufacturing footprint is a practical, natural step and enables us to grow our brand, scale our business, and address worldwide and untapped market demand on an entirely new level, while also taking action to address climate change through inspiring sustainable transportation.”
The company expects to “build” as many as 150,000 EVs using the kits when at full production. Construction on the facility is expected to begin in the first half of this year. No timeline has been offered for completion. Officials said the plant will produce vehicles for Saudi Arabia only, but will eventually export vehicles to other regions. The vehicles will likely be adapted to meet the demands and wants of buyers in the region.
While some might wonder what’s motivating the EV startup to produce battery-electric vehicles on the other side of the world, a quick look at Lucid’s investor rolls might clear it up quickly: Saudi Arabia’s Public Investment Fund, or PIF, is the largest single investor, holding more than a 60% stake in the company.
If the PIF sounds familiar, it should as it was the reported investor Tesla CEO Elon Musk referenced a few years back when he said he was taking the company private at $420 a share guaranteed. He later backtracked, saying the company was discussing the possibility.
The tweet about it sent the company’s stock soaring, and earned Musk and the company fines of $20 million each from the U.S. Securities and Exchange Commission. The deal never came to pass, Tesla’s stock continued to grow, eventually splitting 5-for-1 in August 2019. Tesla now has the largest market cap in the world, valued at a little more than $900 billion.
Investors thinking Lucid’s stock — the company went public last year through a SPAC deal — might rise on the deal are disappointed today. It was down about 15% in late morning, trading in the $24.60-range, slowly recovering from its overnight drop. It closed Monday at $28.98 a share, then opened today at $24.49 a share.