Published: Tue, September 18, 2018
Markets | By Otis Pena

Saudi's PIF invests more than $1 billion in Lucid Motors

Saudi's PIF invests more than $1 billion in Lucid Motors

Saudi Arabia may or may not be interested in taking Tesla private but the Middle Eastern country, via its Public Investment Fund (PIF), is ready to invest in rival electric auto brand Lucid Motors.

Newark, California-based Lucid Motors had raised a total of $131 million in funding prior to the PIF's investment, according to Crunchbase.com.

Lucid Motors first teased its forthcoming electric luxury sedan, the Air, in 2016.

The deal between PIF and Lucid adds to the uncertainty surrounding Tesla, whose Chief Executive Officer Elon Musk tweeted on August 7 that he'd secured funding to take the firm private. Musk later said the Saudi Arabia's Public Investment Fund would be investing in the firm, something Saudi officials never comment on.

The Transaction, part of PIF's International Investment Strategy, will provide the necessary funding to commercially launch Lucid's first electric vehicle, the Lucid Air, in 2020.

The fledgling automaker will use this investment to finish the development and testing of its first vehicle, the Air, in addition to constructing Lucid's upcoming factory in Casa Grande, Arizona.

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The vehicle will have a battery range of 240 miles to 400 miles per charge, depending on what kind of extras are ordered.

In a statement, a spokesperson for Saudi Arabia's sovereign wealth fund said "This investment in the electric vehicle industry, which is now experiencing rapid growth, is an added value to the Fund's portfolio which aims to achieve long-term, growing returns".

Peter Rawlinson, chief technology officer at Lucid, said in a statement, "The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized". Investors pushed Tesla's shares up 11 percent in a day, boosting its valuation by $6 billion.

On Monday, Tesla stock fell as much as 2 per cent before rebounding to close at $294.84, down by just 36 cents.

The PIF said the deal would support the kingdom's Vision 2030 diversification plan, which includes commitments to sustainability and environmentally-friendly technology.

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