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Saudi Arabia’s sovereign wealth fund, PIF, announced that it has sealed a deal to invest more than US$1 billion in Silicon Valley-based electric car maker Lucid to help it bring its only prototype yet, the Lucid Air, to market, Reuters reports, citing a PIF statement.
Reports about a possible Saudi investment in Lucid first emerged in August, when Reuters cited unnamed sources as saying the Kingdom’s sovereign wealth fund was planning to invest in Tesla’s potential rival rather than the luxury carmaker.
The report followed an announcement from Tesla CEO Elon Musk that he was planning to take the company private and had secured funding for the deal with the help of that same fund. Later, however, after much media noise and the launch of a probe by SEC, Musk cancelled his taking-private plans after a meeting with Tesla’s board of directors.
The Lucid deal highlights Saudi Arabia’s growing interest in electric vehicles as it seeks to diversify its economy away from oil. The Fremont company has not yet started mass producing vehicles, but it released the prototype for a luxury sedan, the Lucid Air, two years ago, theoretically challenging Tesla on its own turf. The Lucid Air comes with a price tag of US$100,000. Mass production was slated to begin by the end of this year.
Related: The Age Of Electrification Has Arrived
“They’re not just a financial partner they’re a strategic partner,” Lucid Motors’ Chief Technology Officer Peter Rawlinson said, commenting on the news to Reuters. “It’s all the capital we need for three things: to continue the development of the car, to construct the factory in Arizona, and to initiate the rollout of our global retail strategy and that will commence in the U.S. because that’s our first market.”
Saudi Arabia has also been investing heavily in engine efficiency projects. Aramco has a research facility in Michigan that is working on ways to improve the efficiency of gasoline engines. Earlier this year, at the North American International Auto Show in Detroit, the world’s largest oil company in terms of reserves showcased one of the results of its engine efficiency research: a Ford F-150 pickup truck fitted with an all-new Achates gasoline compression ignition engine.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.