Lucid Plans To Build 100,000 Electric Vehicles For Saudi Government
The Saudi Arabian Ministry of Finance has agreed to buy 50,000 electric vehicles from Lucid, with an option to buy another 50,000 in a ten-year period.
The Public Investment Fund (PIF) of Saudi Arabia owns a 61 percent share in Lucid, which plans to develop its second facility in the country in the near future.
Lucid recently lowered its 2022 production forecast from 20,000 to a range of 12,000 to 14,000 sedans, citing supply-chain constraints.
The relationship between Lucid and Saudi Arabia’s Public Investment Fund (PIF), which owns 61 percent of the company, hasn’t been the main topic of discussion about the start-up, which just started delivering its long-awaited Lucid Air luxury vehicle. But it’s about to get a lot more attention, since Saudi Arabia’s Ministry of Finance has just committed to buying 50,000 Lucid vehicles, including the Air sedan and future Lucid models, over the next ten years, with the option to acquire another 50,000.
It’s safe to say that this is the single largest order for Lucid cars to date, and it’ll undoubtedly help the manufacturer in a variety of ways, including stock value.
Lucid has been delivering the Air sedan for a relatively short period of time but has recently revised its 2022 production outlook downward, slashing it from 20,000 sedans down to a range between 12,000 and 14,000 vehicles, citing the chip shortage and other component-related pressures.
If there is one other thing that’s clear from this order, it’s that Saudi Arabia’s Ministry of Finance buys a lot of cars each year. But does Lucid have the spare capacity at the moment to boost its output upward?
“The order quantity is expected to range from 1,000 to 2,000 vehicles annually and increase to between 4,000 and 7,000 vehicles annually starting in 2025, with the delivery of the vehicles required to commence no later than the second quarter of 2023,” the automaker says.
The vehicles will be built at Lucid’s Arizona plant and also at a future factory that Lucid plans to build in Saudi Arabia.
Saudi Arabia’s order will certainly boost the automaker’s number of reservations, which was reported to be over 25,000 units a couple of months ago.
Another way of looking at this order for up to 100,000 vehicles is that Saudi Arabia’s PIF is dramatically boosting Lucid’s order numbers in a non-organic manner, as opposed to private buyers placing these orders because they actually want a Lucid Air instead of other vehicles on the EV market. But this wouldn’t be an industry first, as large stakeholders of EV start-ups like Amazon had also announced large orders from Rivian over an extended period of time.
However, Lucid’s stock has declined significantly since its late 2021 highs—nearly 70% in fact—due to a slower-than-expected manufacturing rate, which was exacerbated by the company’s estimated 2022 output being lowered by up to 40% due to industry concerns over raw materials and other components. Given the modest annual sales figures for large sedans with gas or electric powertrains, a lot still depends on Lucid’s ability to introduce alternative electric models, ones that don’t cost over $100,000.
“Delivering up to 100,000 Lucid electric vehicles in Saudi Arabia represents another pivotal moment in our acceleration of sustainable transportation worldwide,” said Peter Rawlinson, Lucid’s CEO and CTO. “We are delighted to be supporting Saudi Arabia in achieving its sustainability goals and net zero ambitions, as outlined by Saudi Vision 2030 and the Saudi Green Initiative, by bringing our advanced luxury EVs to Saudi Arabia.”
See Also: Lucid Air Wins “Car Of The Year” Award