US electric car company Lucid Motors is in talks with Saudi Arabia's sovereign wealth fund, the PIF, according to a Reuters report. The two parties have drafted a non-binding agreement, under which, PIF would invest $1 billion (about Rs 7,000 crore) and assume majority ownership.
The initial investment would be $500m (Rs 3,500 crore), with subsequent funding coming as Lucid achieves production milestones. In 2016, the company stated its ambition to begin production of its first model, the Air, which would be built this year at a new, $700m (Rs 4,900 crore) facility in Casa Grande, Arizona. However, it has since pushed that goal back to 2020 while it continues to raise necessary funds.
The Air, which is a prototype, is a sporty luxury sedan that claims to offer a 650km driving range, up to 1,000hp and a 0-100kph time of 2.5sec. The proposed price range is $60,000 to $100,000 (approximately Rs 42 lakh to Rs 55 lakh).
The Saudi Arabian fund is said to have reserves of around $250bn (Rs 17.5 lakh crore) and has been investing heavily to diversify the country's portfolio away from oil. It has already sunk $45bn (Rs 3,200 crore) into a multinational technology group, including Apple and Qualcomm, that will focus on artificial intelligence and robotics.
However, Reuters' sources cautioned that the deal with Lucid isn't certain to proceed. The PIF has also reportedly been in talks to increase its 5 percent share in Tesla, as alluded to by CEO Elon Musk's controversial statement that "funding is secured" to take his company private at $420 ((about Rs 30,000) per share.
Lucid was formed in 2007 under the name Atieva by Bernard Tse, a former board member and vice president of Tesla, and engineer Sam Weng. Its chief technology officer is Peter Rawlinson, a former head engineer at Jaguar, Lotus and Tesla. Tse left in 2015 because of friction with Chinese state-owned BAIC, which had a 25 percent stake. This stake was sold to an anonymous investor in 2016.
Lucid's other connections include a battery supply deal with Samsung and development of technology for the next-generation Formula E car along with McLaren and Sony.