Saudi Arabia ’s sovereign wealth fund is negotiating a greater than $1 billion funding into Lucid Automobiles, an electric automobile startup run by means of battery corporate Atieva, Reuters reports. The Saudis and Lucid are a long way sufficient alongside in discussions that the 2 sides have drawn up a time period sheet, a file most often used to stipulate the broader issues of a potential deal.
because it stands, the sovereign wealth fund ’s investment in Lucid Cars might are available degrees, and the primary would be for $500 million, in keeping with the report. Lucid will reportedly be eligible for two further stages of an undisclosed quantity as long because the corporate hits certain manufacturing milestones. The funding could be a boon for Lucid, which has languished over the closing year as it failed to protected the investment essential to start making cars.
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News of the talks comes not up to two weeks after Saudi Arabia bought FIVE % of Tesla and emerged as a primary participant in Elon Musk ’s effort to take the company personal again. the development of the Lucid Air, the corporate ’s first production automobile, is being led via Peter Rawlinson, who came to the startup from Tesla after serving as leader engineer of the Style S. Atieva used to be founded in 2007 by former Tesla vice president Bernard Tse.
A spokesperson for Lucid Motors mentioned they “don’t comment on Lucid ’s fundraising actions.” A representative for Tesla did not respond to a request for comment.
Lucid Motors unveiled the Air on the La Automobile Show in 2016. It introduced a prototype model to CES in 2017 and spent the rest of the yr slowly letting out more information concerning the automobile, together with its expected value (the bottom type will cost about $60,000) and ship date (2019). It additionally slowly confirmed off the auto ’s impressive efficiency features.
However Atieva, the figure corporate that runs Lucid Cars, has no longer been able to arise with sufficient money to position the Lucid Air into production. the company has locked down a website in Arizona the place it wants to build a $700 million manufacturing unit, but it surely has had hassle securing a new spherical of investment to assist make that happen. Ford was once rumored to be interested in buying the company closing summer time, however a deal never materialized. with the exception of moving to a brand new headquarters in December, the corporate has been most commonly silent over the past 12 months.
Lucid Automobiles was in “an unique negotiation association with a preferred lead investor” as just lately as April, consistent with emails with the native Arizona executive obtained by TechnoArticle through a public data request. It ’s not clear if the most popular lead investor discussed in the emails used to be the Saudi funding fund.
The pause on Lucid ’s investment may need something to do with Faraday Long Run ’s CEO
The Problem with locking down a bigger funding spherical might be coming from the person in the back of rival startup Faraday Long Run. Jia Yueting, the founder and CEO of Faraday Long Term, nonetheless owns a greater than 20 % stake in Atieva that he bought in 2016.
Jia, buoyed by a up to date $2 billion investment into Faraday Future, has change into more reluctant to sell his stake in an instantaneous competitor, according to an individual aware of the location. “Jia had always had a damaging technique with Lucid,” this particular person says. “He doesn ’t need them to prevail.”
Jia ’s attainable interference with Lucid ’s efforts surfaced in a lawsuit in opposition to Faraday Long Run that used to be filed in early August. EVelozcity, another electric automobile startup that was once founded through Faraday Long Run ’s former CFO Stefan Krause, claimed in the grievance that Jia — who is going by way of YT — “has mortgaged the shares in Lucid to alleviate his worsening debt main issue and has actively labored to thwart acquisition attempts, exacerbating the corporate ’s monetary problems. YT did so that you can impede Lucid ’s construction, and YT ’s movements as a shareholder at Lucid were described as not anything in need of ‘disruptive. ’” (A spokesperson for Faraday Long Run did not respond to a request for comment in time for submit.)
in the meantime, Atieva has became to other measures to assist secure investment to maintain Lucid Cars alive. On two occasions in 2017, the company entered into an settlement where it positioned some of its many patents up as collateral for loans, in keeping with prior to now unreported contracts posted by way of the u.s. Patent and Trademark Office.
In March of ultimate yr, the corporate reached an agreement with Trinity Capital, an Arizona hedge fund. That deal used to be price about $30 million, in keeping with the individual familiar with Lucid ’s investment. Lucid reached some other such deal in October with Yinlong Electric Car Group, a Chinese corporate that makes electric buses, for an undisclosed quantity. (A consultant for Trinity Capital declined to remark, and Yinlong Electrical Vehicle couldn’t be reached.)
Lucid additionally attempted closing summer season to protected funding assistance via tax credits worth about $50 million by way of operating with a company known as Dudley Ventures, according to the emails. But the company wasn ’t “at some degree the place lets lend a hand them,” a consultant for Dudley Ventures informed TechnoArticle.