Tesla rival Lucid Motors may snatch Saudi Arabia EV funding

PIF, the Saudi sovereign wealth fund on whom Tesla founder Musk had reportedly pinned his hopes as an investor to help take Tesla “private” is now said to looking to put money into rival electric vehicle startup Lucid Motors.

This is interesting for a couple of reasons, not least of all because it further underlines the fact that a wealthy investment fund hailing from the oil-rich Middle East is seriously considering diversifying investment risks by gradually shifting away from fossil fuels.

It’s also of note that a former ex-employee of Tesla was instrumental in founding Atieva, as Lucid Motors was originally known.

Bernard Tse is CEO of Lucid Motors, but for a time he was on Tesla’s board and also acted as VP for the company’s original “Tesla Energy Group”.

Their Lucid Air EV, which starts at $60,000 and has a minimum range of around 380km, is available to reserve in the US and Canada for $US2,500 and looks to be Lucid’s response to Tesla’s Model 3.

The talks held between PIF and Lucid Motors have so far resulted in a ‘term sheet’, it was reported by Business Insider overnight.

The terms could result in $US500 million being injected into the company, sources told BI, followed by more investments totalling another $US500 million that would be subject to the company successfully hitting certain milestone targets.

Just weeks ago, Musk mused on Twitter about removing Tesla from the pressure of public stock values, tweeting “Am considering taking Tesla private at $420. Funding secured.”

He followed this with an email last week elaborating on the statement, saying, ”the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private.”

Although a sell at $US420 per share would value the company at around $US72 billion, the Tesla CEO – who holds around 20 per cent of the company – hoped that most fellow shareholders would follow him private – and away from the troubles of dealing with short-sellers and analysts.

PIF is said to have already bought 5 per cent of Tesla’s shares, but whether the Saudi sovereign wealth fund ends up going down either path remains to be seen.

But they are not alone, with oil majors such as Shell and BP and others also looking to a future of electric mobility with significant investments in EV-related industries such as charging infrastructure.