Luxury electric vehicle maker Lucid Group Inc. has struck a deal with Saudi Arabia for the purchase of up to 100,000 vehicles over 10 years.
Under the deal, the Saudi government committed to buy 50,000 vehicles with an option to buy 50,000 more during the same period from the Newark, California-based company. The first deliveries are required to begin no later than the second quarter of 2023.
The vehicles include the Lucid Air which is currently under production at Lucid’s manufacturing plant in Casa Grande in Pinal County south of Phoenix. The Saudi government will also buy other future models that will be assembled in Arizona and at a future manufacturing facility that will be built in Saudi Arabia.
Lucid (Nasdaq: LCID) said that the deal factors into the Saudi government’s drive to diversify its economy and provide skilled job opportunities. Lucid has previously said that its factory in Saudi Arabia, its first outside the United States, will be built by 2026.
“Delivering up to 100,000 Lucid electric vehicles in Saudi Arabia represents another pivotal moment in our acceleration of sustainable transportation worldwide,” Lucid CEO and CTO Peter Rawlinson said in a statement. “We are delighted to be supporting Saudi Arabia in achieving its sustainability goals and net zero ambitions, as outlined by Saudi Vision 2030 and the Saudi Green Initiative, by bringing our advanced luxury EVs to Saudi Arabia.”
The deal will begin with the annual purchase of between 1,000 and 2,000 vehicles. That will increase in 2025 to between 4,000 and 7,000 vehicles.
The vehicles will be sold at a price that is the lower than their standard retail price in Saudi Arabia or in the United States, along with added costs such as logistics and importation.
Lucid has had a connection to Saudi Arabia for years. The oil-rich kingdom’s Saudi Public Investment Fund made a $2.9 billion investment in Lucid in 2018 — at a time when Lucid was struggling to find investors — and that was worth more than $20 billion after Lucid went public last year, making it the company’s biggest stakeholder. The Saudi fund has made further investments into the company as well.
The automaker’s stock has climbed since the Saudi purchase deal was announced, with share prices trading up more than 4% in midday activity on Wednesday at around $18.40. Track the stock here.
In a separate deal, Lucid agreed to use silicon carbide chips made by North Carolina semiconductor manufacturer Wolfspeed in the Lucid Air. Wolfspeed has just opened its $1.2 billion factory in upstate New York and is focused on the transition from silicon to silicon carbide in power semiconductors — which can reduce charging times and increase ranges for electric vehicles.
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