By on September 17, 2018

Image: Lucid Motors

The Saudi Arabian investment fund Tesla CEO Elon Musk hoped to tap has instead showered all over Silicon Valley startup Lucid Motors. On Monday, the California automaker announced a $1 billion deal with Saudi Arabia, with the investment going towards the final stages of development, and production, of the Air — an upscale electric five-door expected to come to market in 2020.

The cash should cover the construction of an Arizona production facility the fledgling automaker couldn’t afford to build. Suffice it to say, the domestic, independent car scene just became a little more interesting.

In a statement, the automaker said the $1 billion agreement the Public Investment Fund of Saudi Arabia (PIF) “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.”

With this influx of Saudi dollars, Lucid plans to “complete engineering development and testing of the Lucid Air, construct its factory in Casa Grande, Arizona, begin the global rollout of its retail strategy starting in North America, and enter production for the Lucid Air.”

Both Lucid and PIF waxed on about their shared goal to create a luxury car company in Silicon Valley with a global reach. We’ve covered the shapely Air from many angles before. Lucid’s goal is to offer the vehicle at an attainable (premium) starting price, then go nuts. The sky’s the limit with this vehicle, with some early buzz placing the performance ceiling at somewhere near 1,000 horsepower, and a range of up to 400-plus miles.

Reserving an Air involves filling out an online form and handing over a refundable deposit of $2,500.

“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 spokesman for PIF said.

Tesla, the dominant player in the field, attempted to go private last month based on conversations with the Saudis, but nothing ever came of it. Musk pulled a U-turn and, for a myriad of reasons, watched his stock plunge. It’s worth noting that Lucid’s chief technology officer, Peter Rawlinson, was once chief engineer for the Tesla Model S. Rawlinson jumped ship in 2013.

Joining Rawlinson in developing the Air is Lucid’s design VP, Derek Jenkins, formerly of Mazda and Audi. Jenkins joined the company in 2015.

[Images: Lucid Motors]

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20 Comments on “Would-be Tesla Rival Lucid Motors Nets Saudi Cash, Readies Production...”


  • avatar
    Sub-600

    This comes at a bad time for Tesla as Elon hasn’t exactly been lucid lately.

  • avatar
    stuki

    To those who have spent their entire lives as starstruck oilshieks on the sidelines, or as stock option babies of profitless startups, “a luxury car company in Silicon Valley” probably sounds like some sort of exciting thing, that the world really needs.

    • 0 avatar
      ceipower

      Then there’s Apple ….What are they working on? Some think they still may pull yet another rabbit (perhaps a complete car) out of their hat. They have sufficient CASH to do it , if they choose to. If they were to partner up with Tesla in any fashion , then you have the unbeatable team. Who Knows?

      • 0 avatar
        highdesertcat

        Apple fan here. But also Samsung fan. Like the Hi-Tech.

        Just got through updating all our Apple devices (iPhones, iPads) to iOS 12. Smooth. No hiccups. Marked improvement!

        But would I buy an Apple-funded, Apple-developed EV? Would I buy ANY EV, PEV or Hybrid from any other brand?

        Not much call for limited-range vehicles in the wide-open spaces of the Great American Southwest.

        No doubt, if I lived in NYC like my brother does, an EV could be justified.

        Yet this same brother of mine sold his Leaf to the owner of a Golf Course in Huntsville, AL, where there were fewer issues with keeping the Leaf fully charged.

  • avatar
    NL

    Just how big is the market for large, premium electric sedans?

    • 0 avatar
      highdesertcat

      Just how big is the market for ANY EV, PEV or Hybrid?

      My WAG would be….. not big.

    • 0 avatar
      SCE to AUX

      From 2012 through the end of 2018 (presumably), Tesla will have sold over 140k Model Ss in the US. The S has stabilized around the mid-20k annual volume.

      Total Model X volume in the US is around 60k, and has stabilized around 20k per year.

      But they’re expensive cars to build, and Tesla has always made it clear that they cannot be profitable building only high-dollar, low-volume cars, which is why the Model 3 exists. In one year, it’s already over 90k sales volume, albeit at a $60k average transaction price.

      So Lucid will be entering a tough market against an established player, without the volume to justify the huge capital outlay they’ll need to actually build cars. And importantly, their batteries will cost more than Tesla’s.

      The Saudis aren’t providing a gift; they’ll want to be paid back like any shareholder. Lucid’s road ahead is not impossible, but it will be very difficult.

  • avatar
    CKNSLS Sierra SLT

    Casa Grande, Arizona is literally in the middle of no where. Interesting choice for a production facility.

  • avatar
    jmo2

    I’m always struck by the B&B’s conviction that legacy car makers will be the ones to own the transition to electric. Did Kodak survive the switch to digital? Did DEC survive the transition to PCs? Did Blockbuster survive the transition to streaming?

    • 0 avatar
      ceipower

      point well taken!

    • 0 avatar
      SCE to AUX

      Agreed, and that’s not a conviction I share.

      1. Legacy car makers aren’t interested in losing money on EVs.

      2. Legacy car makers would actually have a very hard time competing with Tesla’s price, infrastructure, and fan base.
      – They don’t have a Gigafactory. Batteries don’t grow on trees.
      – They’re stuck with the legacy dealer model, which is not eager to sell EVs (just look at any Nissan or Chevy dealer for evidence of that).

      3. The government isn’t forcing them to produce EVs in any quantity. I don’t want the government to do this, but car mfrs seem to only do the minimum required by law.

      But I’ll say this too – I’m not convinced the future is electric. Partly electric, but not fully. So I don’t think the legacy mfrs will suffer quite like Kodak or DEC.

    • 0 avatar

      Yeah but Kodak, Xerox et al are American companies. German and Japanese companies survive alright. Fuji now owns Xerox and Chinese company makes Kodaks.
      Fuji survived, Sony, KM, Panasonic, Leica, Canon – all survived and doing well.

    • 0 avatar
      jalop1991

      To be fair, Kodak was full of old farts who had a vested interest in selling FILM. Kodak didn’t sell cameras, as a practical matter.

      This is not AT ALL like Kodak “not surviving the switch to digital”. There was nothing for Kodak to switch TO.

      In this case, we’re talking the manufacture, sale, and technical support of cars. The stuff under the hood, that’s immaterial. And Silicon Valley has no experience OR INTEREST in the design, manufacture, and support of durable hard consumer goods like this. None whatsoever.

      If GM and Ford and Honda and Toyota fail at moving the bits under the hood from ICE to electric (or flux capacitor for all anyone cares), that means we have much more of a problem than you think.

    • 0 avatar
      Lockstops

      Did the mechanical watch companies go bankrupt?

  • avatar
    ceipower

    A “billion” dollars may seem like a lot if your Dr. Evil , but it’s not even a spit in the bucket when it comes to starting an auto manufacture from scratch. I think the Saudis may have miss-stepped on this one. To say they’ll have a ready to sell unit in 2 years seems more optimistic than even Elon Musk’s all to frequent misstatements. IN any case , as a non billionaire, it will be interesting to sit back and watch this all unfold. :-)

    • 0 avatar

      Tesla was started with about $250 million plus the approximately $450 million from the government, making $700 million. (per Wikipedia: https://en.wikipedia.org/wiki/History_of_Tesla_Inc. ).

      I think Elon Musk is an awfully talented starter of companies, though. So I would think this new company would be likely to need a lot more. US$1 billion seems at least somewhat realistic, but if you consider that Model S and X are not profitable, I would be suspicious of how well this new company can do – especially against the formidable talent of Elon Musk and team, and the company’s existing reputation and market position.

  • avatar
    Lockstops

    I hope Derek doesn’t hire his brother Leeroy into the company. That would be catastrophic, but hilarious.

  • avatar
    bd2

    #1 billion doesn’t go far in the automotive industry, so good luck to Lucid.

    But that being said, like Lucid’s design language better than Tesla’s.

  • avatar
    jalop1991

    So, terrorism money comes in to finance building the Continental that Lincoln should have penned but didn’t, which no one wants anyway because it’s not an SUV?

    And this will be successful…how?

    Chinese Buicks. Terrorism financed American built cars. Enjoy yourselves as you fall all over yourselves to slobber all over these things.

  • avatar
    JohnTaurus

    Saudis to Elon: “maybe”

    Elon: “FUNDING SECURED!”

    Saudis: “meh, prolly not… okay, who else we got?”

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