California electric vehicle (EV) startup Lucid Motors is currently in talks with Saudi Arabia’s sovereign wealth fund about building an EV factory in the kingdom, according to a Financial Times interview with Yasir Al-Runayyan, the fund’s governor (via Bloomberg).
The factory could be built near the Red Sea city of Jeddah, according to earlier reports of Lucid’s discussions with the kingdom.
Lucid’s factory could be funded by more than $1 billion raised from the kingdom’s Public Investment Fund (PIF), an investment made in 2018 which is contingent on the company’s use of a Saudi Arabian factory site.
$CCIV the big investment and bail out from PIF plus the new zero carbon city Saudi Arabia is constructing (Neom) means that they have all to gain from Lucid going public
— Intervention (@Int_trading) January 24, 2021
As it seeks to attract companies like Lucid to build factories in the kingdom, Al-Rumayyan told reporters that they are “already in discussion with a number of companies in the health sector.”
Despite the news, the PIF’s international exposure is on the decline, and is expected to lose about 10% of its assets in the next five years, declining from nearly 30% to just 20%.
The PIF will require government cash injections, once the central bank’s reserves are replenished. The kingdom has also stated it may consider listing more shares in Saudi Aramco, given that the “valuation is right,” says Al-Rumayyan.
In any case, a move to Saudi Arabia from Lucid could prove mutually fruitful, in accelerating the company’s goal to produce its electric vehicles, which still have yet to be publicly released.
