Lucid Motor, a new electric vehicle startup, has signed an agreement with the Kingdom of Saudi Arabia for the purchase of up to 100,000 electric cars. Saudi Arabia is one of richest countries in the world. This deal represents the biggest procurement of EVs in history.
According to the contract, Lucid Motor will first sell 50,000 electric vehicles to the Kingdom. The government has an option to buy an extra 50,000 EVs within a 10-year duration. The first vehicle orders will be fulfilled by the 2nd quarter of 2023.
Saudi Arabia's sovereign wealth fund, also known as the Public Investment Fund, owns a 61% stake in Lucid Motor. This country's investment in Lucid allows it to gain prioritized access to electric vehicles. To electrify the kingdom's future, investing in EV makers is an effective way. Another example is Amazon's investment in Rivian. Thus, this investment model seems to be common and normal for EV startups.
Lucid CEO Peter Rawlinson was once the chief vehicle engineer of the Tesla Model S. After leaving Tesla, Rawlinson independently created the Lucid Air EV. Lucid Air is more luxurious than the Model S. On the one hand, the Lucid Air sedan offers great specifications. More importantly, its production car has been delivered from the 3rd quarter of 2021.
In order to expand its capacity, Lucid will build its second EV factory in Saudi Arabia. This new factory is expected to independently fulfill orders from the Middle East in the future. However, before this factory is ready, the Lucid EVs will still be made by the Arizona factory in the US. To fulfill this Saudi Arabia contract, Lucid initially will only deliver 1,000 to 2,000 EVs annually from 2023 on. Then by 2025, the capacity will be gradually ramped up to 4,000~7,000 per year.
Lucid Air is currently considered to be a top notch EV sedan in terms of performance. Except for its software, nearly all of its other aspects are better than Tesla's Model S. The luxury car's features are more fitting for millionaires in Saudi Arabia.
After the deal was announced, Lucid shares were increased by about 5% in New York, putting its recent stock price fall was put to a halt.
(Photo credit: Lucid Motor)