Lucid is reportedly in talks to build an electric car factory in Saudi Arabia, after the country’s investment fund invested in the EV startup.
Lucid and Saudi Arabia
When Lucid first unveiled its plan for a $700 million factory in Arizona back in 2016, they planned to start producing their first vehicle, the Lucid Air, in 2018.
They later pushed the timeline to 2019 and it started to become clear that the company was having difficulty locking in the financing for the factory.
At the end of 2018, Lucid announced that it finally secured a $1 billion investment from the Public Investment Fund of Saudi Arabia (PIF).
It enabled them to start work on the Arizona factory again.
In 2020, Lucid unveiled a new version of the Air and they now plan to start production mid-year.
Now Lucid is building EVs in Saudi Arabia?
Now we’ve learned that the Saudi investment was apparently contingent on Lucid establishing a manufacturing presence in the country.
Bloomberg reports:
“Lucid raised more than $1 billion from the PIF in 2018, an investment that was conditional on the firm developing a site in Saudi Arabia, the people said. King Abdullah Economic City is about 60 miles (97 kilometers) north of Jeddah, the country’s second-biggest city.”
The report states that the electric vehicle company is now discussing building a factory near the city of Jeddah:
“Lucid Motors Inc. is in talks with Saudi Arabia’s sovereign wealth fund to build an electric vehicle factory potentially near the Red Sea city of Jeddah, according to people familiar with the matter.”
The report states that the plan could still change and that Lucid is looking at out locations.
Last month, Lucid completed the first construction phase of its Arizona factory, where it aims to eventually produce up to 400,000 electric cars per year.
Electrek’s Take: Risky Move
It sounds like they have to go to Saudi Arabia due to the investment, but that’s a risky move in my opinion.
The country has been trying to attract manufacturers, especially in the auto industry, for a while now, but they haven’t managed to land any big fish.
A few years ago, they had a deal with Toyota to explore building a factory in the country, but it fell through.
Companies are wary of investing heavily in the country due to the political situation and human rights concerns.
On the business side, auto production relies heavily on suppliers and it could be complicated to establish production without a strong local supply chain.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.
Author: Fred Lambert
Source: Electrek
