Lucid, a Saudi-backed Tesla rival, plans for factory in the kingdom
Lucid Motors – that’s the next big name doing the rounds in the electric vehicle industry.
The U.S.-based company has already raised more than $1 billion in funding from Saudi Arabia’s Public Investment Fund (PIF), according to its 2018 announcement. This investment will help Lucid develop its first all-electric sedan, the Lucid Air. It will also help the company fund the $240 million first phase of its U.S. factory.
The company now wants to use a part of the $1 billion investment to build a factory in Saudi Arabia.
Lucid Motors, which is focusing on the luxury auto segment, will price its first model at $100,000 – an Arab News report states. The Lucid Air is expected to launch commercially in 2020.
The EV revolution
According to Bloomberg New Energy Finance, electric cars are expected to become more affordable than their internal combustion counterparts by 2025, driven primarily by a drop in battery prices.
And it’s not just cars. Electric buses are projected to account for 85 percent of new sales in the sector by 2030, according to Bloomberg New Energy Finance.
Saudi Arabia is hoping to tap in on this trend as part of its Vision 2030. This vision is a call for the kingdom to become less oil-dependent, invite increased global investments, diversify into non-oil revenues, and support a more efficient government.
However, given the fact that more than a quarter of global oil production is spent by autos, these eco-friendly trends could place downward pressure on oil demand in the long run – an issue that the world’s largest exporter of oil is quite aware of.
On the other hand, a study by Goldman Sachs shows that the EV revolution and the growth of renewable energy could, conversely, boost oil prices over the next two decades by beckoning an “age of restraint”. The restraint will be demonstrated in new oil explorations, the Goldman Sachs report states, which in turn could curb a supply glut. This could, therefore, add to the Saudi coffers where steady oil revenues are used to boost non-oil growth.
A cut above the rest
Lucid Motors tryst with Saudi Arabia has set it a cut above its competition, especially Tesla.
On January 17, a Financial Times report indicated that Saudi Arabia’s PIF sovereign fund hedged its 4.9 percent stake in Tesla, thus, reducing its exposure to the company. A day later, Tesla reported that it would cut thousands of jobs to rein in costs.
While Lucid has chosen the luxury and performance segment, its competitors NIO and Byton have decided to concentrate on technical and digitized user experiences. Faraday Future (FF), which is concentrating on the performance market is also catching up.
Lucid Motors unveiled the Lucid Air in 2016 at the Los Angeles Auto Show and then brought its prototype version to the 2017 CES. The car also has top-of-the-line electric powertrain technology and the company boasts that its motors are more advanced than Tesla’s motors. The Air also outdoes the 310-mile range of the top-spec Tesla Model 3 with a range of nearly 400 miles.