Thanks to the cash injection, Lucid Motors will launch its first model in 2020.
A few weeks ago, Tesla CEO Elon Musk posted a now infamous tweet claiming he had secured enough private funding to take the electric car company private. Many believed most, if not all, of that funding came from Saudi Arabia's sovereign wealth fund. Both parties, however, never confirmed the deal. But today, Lucid Motors, another California-based EV startup, announced it will be the recipient of a $1 billion investment from Saudi Arabia. Tesla has yet to comment.
This investment will now allow Lucid to begin production of its first model, a five-door sedan called the Air, in 2020. It will cost around $60,000 and could have up to 1,000 hp and a 400-mile range. The new investment will also be used to build a production plant in Casa Grande, Arizona, where the Air will be made.
In an official statement, Lucid says the investment "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 is already accepting pre-orders for the Air, which simply requires filling out an online form and making a $2,500 refundable deposit.
Saudi Arabia's goal for its sovereign wealth fund, also known as the Public Investment Fund, according to Bloomberg, is for it to have $2 trillion by 2030. What's interesting about the investment in Lucid Motors is that Saudi Arabia was, more than likely, negotiating with it as well as Elon Musk at the same time. It's entirely possible neither company was aware they were both talking to the same money guys.
Musk's plan, however, would have required a nearly $40 billion investment from the fund. When all was said and done, it seems the Saudis had more faith in Lucid Motors, which is also a much cheaper and perhaps less risky investment. But why is oil-rich Saudi Arabia so interested and willing to invest serious money in electric car companies? Because it understands it needs to hedge against its own oil exports. Eventually, all of that oil will dry up.
"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," a spokesperson for the Private Investment Fund said.