PIF, the sovereign wealth fund of Saudi Arabia, who Elon Musk had banked on to help him taking Tesla private, is thinking to invest in Lucid Motors. The electric car startup is holding talks with PIF over a $1BN investment, Reuters quotes sources close to the matter.
The news underscore the apparent appetite of Saudi Arabia to move away from oil and into future fields of growth. PIF could invest as much as 1 billion dollars in Lucid Motors in order to acquire majority ownership. Their first investment would be half of that however, and PIF would make the next 500 million dollar instalment dependent on the EV startup reaching certain production goals.
Lucid Motors has yet to build any electric vehicle. At the end of last year, Lucid Motors marketing manager David Salguero claimed, development of their first EV called Air was 95 percent complete. There has nothing but quiet since though and back then, the EV startup was still constructing its first facility. Once the lines in Arizona will be ready to roll, the target is to churn out 10,000 units of the electric sedan from 2019. Production is to increase six fold to 60,000 units later, that is about half of the maximum capacity of 130,000 electric cars the plant can produce annually (we reported).
If the term sheet, which PIF and Lucid Motors are drawing up allegedly, will build on the above production goals is unclear at this stage. All talks have been private. Moreover, Reuters‘ sources cautioned that the talks may not result in a deal. Neither Lucid Motors nor PIF have issued any further comments.
Yet the development may shed some light on Tesla. The electric carmaker’s CEO Musk had claimed the PIF would help him go private, a deal that could cost as much as 72 billion dollars. His hopes built on the disclosure by the Financial Times reporting that oil-fuelled Saudi Arabia had acquired about 5 percent of the EV maker through PIF. They now hold a close to 3 billion dollar stake in Tesla reportedly.
PIF has not commented on a potential involvement in taking Tesla private. And, Tesla or Elon Musk have yet to come up with details on a deal for the electric vehicle maker, an issue that has put increasing strain on the CEO, which showed in an interview with the New York Times.