Saudi wealth fund plunges $1bn into Tesla rival Lucid

  • Saudi wealth fund plunges $1bn into Tesla rival Lucid

Saudi wealth fund plunges $1bn into Tesla rival Lucid

Newark, California-based Lucid Motors had raised a total of $131 million in funding prior to the PIF's investment, according to Crunchbase.com. Shares were up around 1% later on Monday after the initial stock dip on word of the Saudi investment in Lucid. The investment comes after reports that the fund has also built a near 5 per cent stake in Tesla, worth about $2.5 billion.

"This investment in the electric vehicle sector, which is now witnessing rapid growth and expansion, is an added value to the Fund's portfolio which aims to achieve growing returns on the economy in the Kingdom", the PIF said.

It will now be able to build its factory in Arizona, complete engineering development and testing of its Lucid Air vehicle and begin the "global rollout of its retail strategy", it said.

Headquartered in Silicon Valley, Lucid's mission is to inspire the adoption of sustainable energy by creating the most captivating electric vehicles.

A spokesperson for the Saudi public investment fund said in a statement, "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. Our investment in Lucid is a strong example of these objectives". The range-topping version is expected to offer as much as 1,000 hp and 400 miles.

"The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realized,"Lucid's Chief Technology Officer Peter Rawlinson said". The Securities and Exchange Commission is reportedly investigating Musk's disclosure on Twitter. Experts say regulators likely are investigating if Musk was truthful in the tweet about having the financing set for the deal.

Musk said in a blog post on August 13 he had "no question" that the Saudis would finance such a transaction following a July 31 meeting.

The Las Vegas-based Sovereign Wealth Fund Institute estimates Saudi Arabia's PIF has holdings of $250 billion. The kingdom is accelerating its investment in renewables to decrease its own reliance on oil for electricity, and presumably now seeing investing in electric vehicles as another means to diversify away from its dependence on oil.

However, other business promises made by the crown prince have yet to come to fruition.