Saudi Arabia’s Public Investment Fund (PIF) backed American automotive company Lucid Motors is in negotiations to set up an electric vehicle (EV) plant, probably near the Red Sea city of Jeddah.
This move will mark a major expansion for California-based Lucid Motors and Saudi Arabia, which is attempting to become a Middle Eastern center for producing EVs as it diversifies its economy from oil.
According to the people familiar with the matter, “The plans are advanced but could change.” ‘Neom’, a new city being built in the northwest of Saudi Arabia, is being considered by PIF and Lucid as a potential location for their new plant.
Lucid is one of the many US companies looking to take on Elon Musk’s Tesla. The startup company is targeting the luxury end of the EV market and its CEO, Peter Rawlinson, was formerly Tesla’s chief engineer on the Model S sedan. In 2018, Lucid received $1 billion from PIF, an investment that was conditional on the firm developing a site in King Abdullah Economic City, the country’s second-biggest city which is about 97 kilometers north of Jeddah.
In 2022, Lucid aims to manufacture a cheaper version of its sedan for $75,000, which will be able to drive more than 400 miles on a single charge, and eventually venture into SUVs.
PIF in Saudi development
Over the next few years, the PIF is expected to play a major role in Saudi growth projects as the government tries to slash spending and hold the budget deficit in check after the coronavirus-induced oil rout. The fund’s governor, Yasir Al Rumayyan said it would invest at least $40 billion locally this year and in 2022.
According to the governor, PIF expects to raise its assets to more than $2.5 trillion. The PIF had invested in Tesla before selling almost all its shares in early 2020.