Saudi Arabia's sovereign wealth fund invested more than $1 billion Monday in a Silicon Valley electric auto maker just weeks after Tesla CEO Elon Musk earlier claimed the kingdom would help his own firm go private.
Founded in 2007 by former Tesla vice president and board member Bernard Tse and partner Sam Weng as Atieva Motors, Lucid started by building batteries for electric buses, cars, and motorcycles. Lucid and PIF are strongly aligned around the vision to create a global luxury electric vehicle company.
PIF has an interest in electric cars and earlier this year built a stake of just under 5 percent in Tesla by snapping up shares in the open market, rather than acquiring newly issued shares.
In August, Tesla chief executive Elon Musk suggested that he had held talks with the same Saudi investment fund about taking Tesla private. Lucid's press release says the Air is now slated for a 2020 release, which is two years beyond when the company first expected to launch its electric auto.
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The fledgling automaker will use this investment to finish the development and testing of its first auto, the Air, in addition to constructing Lucid's upcoming factory in Casa Grande, Arizona. Range will extend to 400 miles on a full charge, Lucid said.
The Lucid investment, which PIF said is more than $1 billion but did not give an exact figure, is also part of Saudi Arabia's plan to build an environmentally friendly economy, to diversify the kingdom away from reliance on crude oil. "Our investment in Lucid is a strong example of these objectives".
Saudi Arabia's 33-year-old Crown Prince Mohammed bin Salman has talked about using the country's PIF to help diversify the economy of the kingdom, which relies nearly entirely on money made from its oil sales. The $11 billion loan allows it to make further investments without divesting from its other holdings. The most notable is his January 2016 pledge for an initial public offering of the state-run oil behemoth Saudi Aramco.
But analysts have offered far lower valuations for Aramco and multiple delays have struck the project since.