Saudi fund pumps $1B into electric car maker
DUBAI, United Arab Emirates—Saudi Arabia’s sovereign wealth fund invested more than $1 billion Monday in a Silicon Valley electric car maker just weeks after Tesla CEO Elon Musk earlier claimed the kingdom would help his own firm go private.
Tesla stock dropped briefly Monday in reaction to the news, the same day that the Saudi fund announced it had taken its first loan, an $11 billion borrowing from global banks as it tries to expand its investments. It wasn’t clear if that loan money played a part in the electric-car investment.
The infusion represents a coup for Lucid Motors, a Newark, Calif., 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 aesthetically pleasing and fast, in addition to reducing air pollution.
The electric-car investment is a bold move for Saudi Arabia, an ultraconservative kingdom that for decades has relied on its oil wealth as the world’s top crude exporter but now appears determined to build a more diversified portfolio to lessen its dependence on fossil fuels. But previous splashy market-moving promises by the kingdom’s assertive Crown Prince Mohammed bin Salman have yet to materialize.
Lucid is depending on the Saudi money to help realize its goal of delivering its first vehicle, the Lucid Air, in 2020. Besides helping to put the final touches on the Air model, Lucid plans to use the money to finish the construction of its Casa Grande, Ariz., factory, where it has pledged to employ 2,000 workers by 2022, at which point it aims to be manufacturing 130,000 vehicles annually.
The Lucid Air will sell at a starting price of $52,500, although the initial batch of vehicles will cost more than $100,000, according to the company.
The vehicle will have a battery range of 240 miles to 400 miles per charge, depending on what kind of extras are ordered. It is being designed in the mold of a jet for carrying executives, with more room in the interior cabin than cars powered by gas combustion engines. Lucid Air is supposed to fast; in early tests on tracks, it has topped 200 miles per hour, according to the company.
“We will demonstrate the full potential of the electric-connected vehicle in order to push the industry forward,” said Peter Rawlinson, Lucid’s chief technology officer and former the lead engineer of the Tesla Model S.