Saudi Arabia’s PIF may invest $1bn in Tesla rival Lucid Motors

by IndianAuto Team | 24/08/2018
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Public Investment Fund (PIF) of Saudi Arabia has reportedly been in talks with the Tesla rival which is Lucid Motors regard of a possible Rs.7000 crore investment.

PIF, the sovereign wealth fund of Saudi Arabia, who Elon Musk had banked on to lend him a hand in taking Tesla private, is floating an idea of investing in Lucid Motors. 

Lucid Motors is a US electric car company which is 11-year-experience company established by a Silicon Valley veteran. Lucid Motors has been one of the competitors of Tesla based in California. Specifically, Lucid was formed in 2007 with the name Atieva by Bernard Tse, a former board member and vice president of Tesla, and engineer Sam Weng. Its chief technology officer is Peter Rawlinson, a former head engineer at Jaguar, Lotus and Tesla. 

Lucid car silver color front look

Lucid was established in 2007 with the name Atieva by Bernard Tse, a former board member and vice president of Tesla

Earlier this month, Tesla chief executive, Elon Musk claimed PIF could help him fund a $420 per share buyback of the company to bring Telsa private – later tweeting that funding was “secured”.

However, PIF and Lucid Motors now joined hands to draft a non-binding agreement. In particular, PIF would make a $1 billion (about Rs 7,000 crore) which is possible as an alternative to playing a key role in taking Tesla private.

The initial investment would be $500m (Rs 3,500 crore) in advance, in which the subsequent funding comes as Lucid achieves production milestones. 

Lucid car silver color body look

PIF and Lucid Motors now joined hands to draft a non-binding agreement

In 2016, the company stated its goals to produce its first model which is the Air. It would be built this year at a new, $700m (Rs 4,900 crore) facility in Casa Grande, Arizona. However, it has since pushed that goal back to 2020 while it continues to raise the necessary funds.

Regardless of what the Saudi Public Investment Fund does with Tesla, its $250 billion war chest could get Lucid’s Air electric car into production.

Eric Noble, president of consulting firm The CarLab said,

“The Lucid Air is legitimate technology and very well designed. They have a stellar team, they just need money.”

The Air, which is a prototype, is a sporty luxury sedan that claims to offer a 650km driving range, up to 1,000hp and a 0-100kph time of 2.5sec. The proposed price range is $60,000 to $100,000 (approximately Rs 42 lakh to Rs 55 lakh).

Lucid car silver color tailgate

The Air is a sporty luxury sedan that claims to offer a 650km driving range

The Saudi Arabian fund is reported to have reserves of around $250bn (Rs 17.5 lakh crore). With the aims to expand the country's portfolio away from oil, the company has been investing heavily. 

Particularly, it has already sunk $45bn (Rs 3,200 crore) into a multinational technology group, including Apple and Qualcomm, that will focus on artificial intelligence and robotics.

However, the deal with Lucid has not been certain to proceed yet. The PIF has also reportedly been in talks to increase its 5 percent share in Tesla, as alluded to by CEO Elon Musk's controversial statement that "funding is secured" to take his company private at $420 ((about Rs 30,000) per share.

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