Lucid Group’s largest shareholder has agreed to buy 100,000 of its electric vehicles over the next decade.
The government of Saudi Arabia, which is connected to the kingdom’s Public Investment Fund that owns 61% of Lucid, has made an initial commitment to buy 50,000 of Lucid’s EV with an option to purchase an additional 50,000 vehicles over that same 10-year time frame, according to an announcement Tuesday. Lucid shares popped 5% on the news in after-market trading.
The pledge includes the Lucid Air, a luxury sedan that launched last year, as well as future models such as the upcoming Gravity SUV. The vehicles will come from Lucid’s factory in Arizona and later from a future assembly plant in Saudi Arabia. The EV sales agreement is part of the Saudi kingdom’s Vision 2030 plan, which seeks to diversify its economy away from fossil fuels.
Saudi Arabia’s Public Investment Fund, or PIF, invested $1 billion into Lucid Motors in 2018 when it was still a privately held company. The investment agreement came just six weeks after Tesla CEO Elon Musk tweeted that he was considering taking Tesla private at $420 a share and had secured the proper funding to make the leap. Musk suggested at the time that Saudi’s wealth fund was interested in backing the company’s move from public to private.
The investment came at a crucial moment for Lucid, which was struggling to raise the funds needed to produce the Lucid Air. PIF held onto its investment when Lucid became a publicly traded company via a merger with a special purpose acquisition company. Today, PIF holds 1,015,252,523 shares of Lucid.
While agreements with a decades-long timeline can fail to provide an immediate sales boost, it does appear that in this case the purchases will begin this year. The order quantity is expected to range from 1,000 to 2,000 vehicles annually and increase to between 4,000 and 7,000 vehicles annually starting in 2025. The deliveries will begin no later than the second quarter of 2023.
It’s unclear exactly what the kingdom will pay for Lucid’s vehicles. However, legal jargon tucked into the announcement indicates per a TechCrunch analysis of the language that the kingdom will get the cheaper price when comparing MSRP in the U.S. to MSRP in Saudi Arabia because Lucid has not yet established an MSRP in the Kingdom.