Lucid confirms factory plans in Saudi Arabia
Lucid Motors plans to start building its announced factory in Saudi Arabia before the end of the first half of 2022. The US electric car manufacturer has also confirmed the location officially – the same goes for production capacity.
Lucid says that the plant, which was only announced this January, will be wholly owned by the US company, meaning it will not be (partially) held by a Saudi partner. The site chosen is King Abdullah Economic City (KAEC), a planned city under construction that is expected to have a population of over one million by 2030. When rumours of a possible Lucid plant in Saudi Arabia first emerged in January 2021, the port city of Jeddah was still considered the favourite. The actual KAEC site is now a bit further north but still on the Red Sea.
The plant will be designed for a maximum annual production capacity of 150,000 vehicles. Lucid estimates that the site could result in up to $3.4 billion in value for the company over 15 years. The plant is expected to create “several thousand highly skilled jobs.”
Initially, the plans only involve assembly, for which Lucid wants to build facilities at KAEC capable of “reassembling Lucid Air vehicle kits” prefabricated at the US Casa Grande plant. Lucid has not yet said whether this will be semi-knocked-down (SKD) or completely-knocked-down (CKD) manufacturing, only mentioning “kits.” “In the course of time”, the production of complete vehicles is then to take place in Saudi Arabia. This would then require not only lines for final assembly but also a press shop, a body shop and paint shops.
As a first step, agreements have now been signed with the Saudi Arabian Ministry of Investment (“MISA”), the Saudi Industrial Development Fund (“SIDF”) and King Abdullah Economic City (“KAEC”). The excavators are then expected to roll before the end of the first half of the year.
“Lucid strives to be a catalyst for change wherever we go, so it makes perfect sense for us to bring electric vehicles to one of the largest oil-producing countries in the world,” says Lucid CEO Peter Rawlinson. “Building a global manufacturing base is a practical, natural step and allows us to grow our brand, scale our business and address global and untapped market demand at a whole new level while taking action to address climate change through inspiring sustainable transportation.”
The Saudi sovereign wealth fund PIF (Public Investment Fund) has been a major investor in Lucid for years. As a result, Rawlinson highlights the “strong relationships” with the PIF and its other Saudi partners, which gives Lucid “unique insight into the demand for luxury cars and SUVs in Saudi Arabia and beyond.”
In the U.S., Lucid Motors has reportedly begun expanding its Casa Grande plant in Arizona to a capacity of 90,000 e-cars by the end of 2023. The company says that further expansion of the US plant to an annual production capacity of 365,000 vehicles is already planned. Lucid aims to produce more than 500,000 electric cars per year with the new factory in Saudi Arabia.
Electric car production at Lucid Motors is currently proving difficult. As the company announced in its financial results, only 125 units of the Lucid Air could be delivered in 2021 instead of the targeted 577 units, and a total of 300 vehicles to date. Lucid Motors also cut its forecast for 2022, saying it would only produce 12,000 to 14,000 cars this year instead of the 20,000 expected due to supply chain constraints. “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest quality products,” Rawlinson said of the financials. “We remain confident in our ability to capture the tremendous opportunities ahead given our technology leadership and strong demand for our cars.”
Back in January, Lucid Chairman Andrew Liveris indicated that they were having supply chain issues. Numbers were not given at the time.
The business figures in and of themselves are still not very meaningful because of the low shipments. The company’s fourth-quarter revenue was $26.4 million, $21.3 million of which came from the first 125 Dream Edition units.
With reporting by Sebastian Schaal, Germany.