Saudi Fund Investing In EV Maker Lucid Motors
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Bloomberg reported that Saudi Arabia’s sovereign wealth fund signed an agreement to invest more than $1 billion in aspiring U.S. electric-car maker Lucid Motors Inc., months after building a stake in Elon Musk-led rival Tesla Inc.
The deal clinches crucial funding needed for Lucid to start making its first model, the Air sedan, in 2020. The Silicon Valley start-up is years behind schedule in building a plant in Arizona and starting production of the car that it has said will start at $60,000.
Bloomberg reported that Saudi Arabia, the world’s biggest oil exporter, has been diversifying its economy after the collapse in crude prices. As part of the plan, the kingdom plans to turn the Public Investment Fund into the world’s biggest sovereign fund, controlling more than $2 trillion by 2030, and to hedge against fluctuations in oil prices.
“By investing in the rapidly expanding electric vehicle market, [the Public Investment Fund] 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,” the fund said in a statement.
The fund’s investment in Lucid adds to the uncertainty surrounding Tesla, whose chief executive, Musk, tweeted Aug. 7 that he’d secured funding to take Tesla private. Musk clarified six days later that while the Saudi fund had expressed interest in helping take Tesla private, it still needed to conduct due diligence on the potential deal. On Aug. 24, he announced that Tesla would remain a publicly traded company after all.