Luxury electric vehicle (EV) manufacturer, Lucid Group, has taken a significant step towards expanding its global operations by opening its first international factory in Saudi Arabia. This move is particularly noteworthy as Saudi Arabia is not only the location of the factory but also home to Lucid’s largest shareholder, the Public Investment Fund (PIF) of Saudi Arabia.
Key Takeaway
Luxury EV maker Lucid has opened its first international factory in Saudi Arabia, showcasing its commitment to expanding its global footprint. The strategic partnership with the Saudi government and its largest shareholder, the Public Investment Fund, reaffirms Lucid’s position as a leading player in the EV market. This factory opening marks an important milestone in Saudi Arabia’s efforts to transition towards a more sustainable and diverse economy.
The New Factory
The state-of-the-art factory is situated in the city of Jeddah and has an initial capacity to assemble 5,000 Lucid vehicles each year. However, Lucid has ambitious plans to expand the facility to a production capacity capable of manufacturing up to 150,000 vehicles annually, solidifying its position as a major player in the EV market. At the onset, the plant will focus on re-assembling Lucid Air vehicle kits that are pre-manufactured at the company’s U.S. factory in Casa Grande, Arizona. Lucid intends to transition the Saudi Arabian factory to complete build unit production after the middle of this decade.
Strategic Partnership
The opening of the factory comes as a result of a strategic partnership between Lucid and the Saudi Arabian government. As part of the government’s Vision 2030 plan, which aims to diversify the country’s economy away from fossil fuels, Saudi Arabia’s PIF made a bold commitment to purchase 100,000 electric vehicles from Lucid over the next ten years. Initially, the government pledged to buy 50,000 Lucid EVs, with an option to acquire an additional 50,000 vehicles within the same timeframe. The agreement encompasses Lucid’s flagship model, the Lucid Air, as well as upcoming models like the Gravity SUV.
Leveraging Shareholder Support
The ties between Lucid and the PIF of Saudi Arabia were solidified in 2018 when the investment fund injected $1 billion into the company while it was privately held. This investment proved instrumental in enabling Lucid to commence production of its first EV, the Lucid Air. Even after Lucid went public through a merger with a special purpose acquisition company, the PIF retained its significant investment, demonstrating the mutual confidence and long-term vision of both parties.
