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 car brand Lucid Motors.
Silicon Valley-based Lucid confirmed Monday that the Saudis will invest $1.0 billion in the company, believed to be for a majority stake. The deal, which is still subject to regulatory approval, is thought to consist of an initial cash injection of $500 million and then additional injections dependent on certain production milestones being reached.
The announcement comes a little more than a month after Tesla CEO Elon Musk revealed that the Saudis had bought 5.0 percent of Tesla and was considering taking the company private. However, the Saudis never backed Musk's infamous “funding secured” comment and the Tesla CEO in late August said the company would remain public.
As for Lucid, it will use the much-needed funds to complete development of its first product, the Air, and get a factory up and running in Casa Grande, Arizona. If all goes to plan, Lucid hopes to have the high-performance electric sedan in production by 2020.
The Air was unveiled in late 2016 and in base trim is expected to offer 400 horsepower and 240 miles of range. The range-topping version is expected to offer as much as 1,000 hp and 400 miles.
You might be wondering why the Saudis, one of the world's biggest oil producers, is investing in electric car companies. It's part of the country's Vision 2030 plan aimed at boosting revenues and ending the country's dependence on oil, though things haven't gone as smoothly as the country's leaders expected due to the costly war on neighboring Yemen and the cancellation of the much-hyped initial public offering of Saudi Aramco. The state-controlled oil giant was meant to be floated in the second half of 2018 but the IPO has been put on the back burner, with many blaming a lack of transparency into the company's operations as a cause for the lack of interest.