Saudi Arabia’s sovereign wealth fund agreed Monday to invest $1 billion in Lucid Motors, an upstart electric-car maker that aims to rival Tesla in the luxury vehicle market.
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The Saudi Public Investment Fund (PIF) said the investment will help the 11-year-old company launch its first electric vehicle, the Lucid Air, by 2020. Also in a statement, the PIF noted that Lucid plans to use some of the new funding to build a planned factory in Casa Grande, Arizona, and establish a retail footprint in North America.
Newark, California-based Lucid Motors had raised a total of $131 million in funding prior to the PIF’s investment, according to Crunchbase.com.
The PIF’s Lucid investment comes a little more than a month after Tesla CEO Elon Musk tweeted that he had “funding secured” to take the company private at $420 per share. Musk indicated that Saudi Arabia would invest in Tesla if it went private, although the PIF did not comment on the possibility. Musk has since scrapped the take-private plan. The Securities and Exchange Commission is reportedly investigating Musk’s disclosure on Twitter.
The PIF already owns a nearly 5 percent stake in Tesla, according to multiple reports.
The investments in Tesla and Lucid Motors, as well as other firms including Uber, are part of Saudi Arabia’s efforts to diversify its economy beyond oil. Also on Monday, the Saudi fund announced that it had received an $11 billion loan, which will likely help fund additional investments.
Lucid has begun taking orders for its first vehicle, the all-electric Lucid Air, with prices starting at $52,500. The company plans to ramp up production to 130,000 vehicles annually by 2022.