For Tesla competitor Lucid Motors, “funding” is definitely “confirmed”…
Confirming rumors from mid-August, The Saudi Public Investment Fund has confirmed an investment of over $1 billion in Tesla competitor Lucid Motors to enable commercial launch of their first electric vehicle, Lucid Air, in 2020.
TSLA shares are sliding on the news…
Full Press Release:
Lucid Motors announced today that it has executed a US$1bn+ investment agreement with the Public Investment Fund of Saudi Arabia (“PIF”), through a special-purpose vehicle wholly owned by PIF.
Under the terms of the agreement, the parties made binding undertakings to carry out the Transaction subject to regulatory approvals and customary closing conditions.
The Transaction represents a major milestone for Lucid and will provide the Company with the necessary funding to commercially launch its first electric vehicle, the Lucid Air in 2020. Lucid plans to use the funding to complete engineering development and testing of the Lucid Air, construct its factory in Casa Grande, Arizona, begin the global rollout of its retail strategy starting in North America, and enter production for the Lucid Air.
Lucid’s mission is to inspire the adoption of sustainable energy by creating the most captivating luxury electric vehicles, centered around the human experience. “The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized. This is inhibiting the pace at which sustainable mobility and energy are adopted. At Lucid, we will demonstrate the full potential of the electric connected vehicle in order to push the industry forward,” said Peter Rawlinson, Chief Technology Officer of Lucid.
Lucid and PIF are strongly aligned around the vision to create a global luxury electric car company based in the heart of Silicon Valley with world-class engineering talent. Lucid will work closely with PIF to ensure a strategic focus on quickly bringing its products to market at a time of rapid change in the automotive industry.
A spokesperson for PIF said: “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 of Saudi Arabia.”
The spokesperson added: “PIF’s international investment strategy aims to strengthen PIF’s performance as an active contributor in the international economy, an investor in the industries of the future and the partner of choice for international investment opportunities. Our investment in Lucid is a strong example of these objectives.”
As a reminder, we noted previously that after Musk said that the funding for his going private deal was “secured,” he later elaborated that he believed Saudi Arabia’s PIF could provide the necessary funding, although sources close to the sovereign wealth fund have since played down that prospect; today’s news effectively kills any hope that PIF would participate in a Tesla buyout (were it to be reignited by another Musk tweet confirming ‘funding confirmed’).
As for Lucid, not only is it a company that is far earlier in its development, thus allowing investors a far greater piece of the pie at this moment, but ironically, it was founded in 2007 by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former exec at Oracle Corp and Redback Networks. It received backing from Chinese investors, including tech entrepreneur Jia Yueting and state-owned automaker BAIC. Other venture capital backers have included Venrock, Mitsui & Co and Tsing Capital.