Lucid Group Inc. (LCID, Financial) reportedly has plans to build a plant in Saudi Arabia in 2025 or 2026. That's not all that surprising, since the car maker’s largest shareholder is Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF).
The news broke on Wednesday. Lucid Chairman Andrew Liveris was recently quoted as saying, “Now that we are successfully producing and selling cars in the U.S., our attention is turning to this factory here (Saudi Arabia).”
“As we understand, most likely it will be some kind of joint venture with a significant contribution by PIF,” reported InsideEVs. “The unofficial sources point out that the potential location might be the Red Sea city of Jeddah or Neom, a new city in the northwest of Saudi Arabia.”
Among the details still to be hammered out are the percent of ownership for Lucid and the entities with which it will collaborate to build the Saudi Arabia factory.
For the time being, Lucid – which boasts that it is introducing luxury cars to the EV space - is concentrating on increasing production of its Lucid Air model. The stated goals are to produce 20,000 this year, grow its European business and create momentum for the all-electric luxury SUV called Project Gravity off the assembly line. While the company has not yet released the numbers on production and delivery for last year, insiders estimate that sales numbered in the hundreds.
“The maker of the $169,000 Air sedan has been in talks with Saudi Arabia’s sovereign wealth fund to build an EV plant potentially near the Red Sea city of Jeddah, people familiar with the matter said earlier this year,” reported Aljazeera on Wednesday. “The $360 billion Public Investment Fund, which is already a shareholder in Lucid, will provide much of the money for the site at the King Abdullah Economic City, the people said, asking not be named because the discussions are private.”
In early trading this morning, Lucid’s stock was priced at $41.74, up 40 cents per share, or 1.34%, on the positive news. A major reason is its judicious growth plan. The company managed to collect $4.4 billion in net cash when it merged with special purpose acquisition company (SPAC) Churchill Capital IV last summer. An additional $1.75 billion came as a result of a convertible senior-note offering with an initial conversion rate of $54.78 a share. If it spends this money wisely, it should be able to grow without overextending itself.
Now might not be the best time for those interested in Lucid to pick up shares, though, despite its promising growth strategy. According to the S1 form filed last August with the U.S. Securities and Exchange Commission (SEC), early shareholders will be permitted to sell their shares 180 days after the closing of the SPAC merger. “This is a significant event because early Lucid shareholders make up a majority of Lucid’s ownership. Furthermore, the S1 notes that out of 1.61 billion shares outstanding, roughly 1.19 billion shares are held by Lucid shareholders. Therefore, investors should keep in mind that Jan. 19 will most likely be an extremely volatile day for LCID stock.”
