That's not a bad bit of business.
The Saudi Arabian government has agreed to buy 100,000 Lucid models over a ten-year period. The makers of the Lucid Air and Gravity are set to deliver half that this year, with the other 50,000 cars trickling in over the next ten years. That means new Lucid models will be reaching Saudi shores over that time period. The Saudi government also has an option to buy another 50,000 models over the same timeframe. In short, Lucid just made a huge chunk of change. The Californian carmaker also saw its share price rise 5.4% following the announcement.
Saudi Arabia has close ties with the carmaker. With a 61% stake in the company, the country's Public Investment Fund is Lucid's largest shareholder.
"Delivering up to 100,000 Lucid electric vehicles in Saudi Arabia represents another pivotal moment in our acceleration of sustainable transportation worldwide," said Peter Rawlinson, Lucid's CEO. Rawlinson went on to say "We are delighted to be supporting Saudi Arabia in achieving its sustainability goals and net-zero ambitions, as outlined by Saudi Vision 2030 and the Saudi Green Initiative."
Some of those vehicles will eventually be made within Saudi Arabia, at an unbuilt international manufacturing plant within the nation. The rest will of course come from Lucid's Arizona factory, with deliveries to start no later than Q2 of 2023. Over the next few years, Lucid says cars will trickle into the Kingdom at around 1,000-2,000 cars annually, with an increase to around 4,000-5,000 cars starting in 2025.
Over ten years, that's a huge amount of cash getting funneled into the electric automaker's bank accounts. Let's do some quick math. Lucid says the cars will be bought based on either the standard retail price in either Saudi Arabia or the US, whichever is lower. Then there's logistics and importation costs, which are frankly too hard to estimate, as well as the cost of homologating the cars for Saudi roads.
So, let's just use the base Lucid Air's MSRP of $69,900 for now. For 50,000 cars that comes to $3.495 billion. Add that to another $3.495 billion over the next several years, and Lucid stands to make close to $7 billion. Given additional costs and the fact that future models will be imported, combined with our assumption that these will not be base Airs making their way to the Kingdom, and Lucid just caught a massive bag. Now, the real question is how the brand will use that cash.