Tesla shares slip as PIF invests $1bn in US rival

Tesla shares closed down 0.14 per cent on Monday at $294.84 after Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, signed a more than $1 billion (Dh3.67bn) investment agreement with Lucid Motors of the US that will help the start-up electric car maker commercially launch its first vehicle by 2020.

PIF, which is an investor in Tesla, whose stock is down 5.3 per cent this year, has made the investment through its wholly-owned special purpose vehicle, the fund said. The two parties have made “binding undertakings” to carry out the deal, which is subject to regulatory approvals.

The agreement is part of PIF’s international investment strategy, which will provide necessary funding for launching Lucid’s first electric vehicle, the Lucid Air. The company plans to use the funding to complete engineering development and testing of the car, construct its factory in Arizona and begin production for the global rollout of the vehicle, starting from North America.

“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,” a PIF spokesman said.

The PIF aims to strengthen its position an investor in the industries of the future and become a partner of choice for international investments, the spokesman said.

The PIF is at the heart of the economic diversification programme as the kingdom seeks to cut dependence on oil revenues. In recent years the PIF has been building stakes in local and international companies. Along with Abu Dhabi’s Mubadala Development, the PIF is part of the core investor group in Japanese SoftBank Group’s $93bn Vision Fund, which invests in technology sectors.