EV maker Lucid Group opened its first foreign assembly plant Wednesday, the facility also serving as the first car manufacturing plant in Saudi Arabia.
Lucid has developed increasing ties with the Middle East kingdom. Saudi’s sovereign investment fund playing a lead role in the $3 billion bailout Lucid received in June.
“We are delighted to make history today in Saudi Arabia by opening the country’s first car manufacturing facility, which will produce our award-winning electric vehicles and support the country’s vision for a more sustainable and diversified economy,” said Peter Rawlinson, CEO and CTO, Lucid Group.
Lucid announced plans for the plant last year. The kingdom, it said, had committed to purchasing 100,000 vehicles from the automaker over a 10-year period.
Dubbed AMP-2, the operation is Lucid’s second assembly plant. But unlike the original facility in Casa Grande, Arizona, the one in King Abdullah Economic City is, for now, limited to handling “knocked-down” kits, most of the components shipped in from the United States. Production capacity is just 5,000 vehicles annually.
According to a Lucid statement, it “aims to transition AMP-2 to complete build unit (CBU) production after the middle of the decade, with an additional annual capacity of 150,000 cars.”
Lucid shares rebound
At the moment, Lucid produces just one product, though there are a number of variants of its all-electric Air sedan. It plans to launch a second model, the high-end Gravity SUV, next year. The longer-term plan is to add more mainstream product lines.
Lucid has struggled to ramp up operations at the Casa Grande plant, slow deliveries drawing its cash reserves to dangerous levels, according to industry analysts. A group of investors stepped in to prop up the company with a $3 billion bailout in May. Of that, $1.8 billion came from the Saudis, giving them more than a 60% stake in the startup automaker.
Traded under the ticker symbol LCID, Lucid shares enjoyed a brief surge following the bailout. But they have since been tumbling — dipping 15.45% in September to a new 52-week low of $4.97. But, as of noon EDT on Sept. 27, the stock had rebounded by about 2.5%, to $5.45 a share.
Saudis go green
The Saudis have invested in a number of automakers in recent years, including both Mercedes-Benz and Aston Martin. It became the second-largest shareholder in the British brand last year, with a 17% stake.
Though the majority of its wealth comes from its vast supply of oil, Saudi leaders have been making a number of moves to diversify into green energy as the world begins moving to a carbon-neutral future. That includes several automotive investments.
The Saudi Green Initiative calls for EVs to account for 30% of the kingdom’s new vehicle sales by 2030.
More manufacturing plans in Saudi’s future
The Middle East Lucid plant may have company in the near future. Last November, the Saudi Public Investment Fund announced it was in talks with Taiwan’s Foxconn to create a new venture called Velocity. The goal is to set up another EV plant in the kingdom.
The goal is to create an entirely new brand, Ceer, “to produce electric vehicles in Saudi Arabia, and will design, manufacture and sell a range of vehicles for consumers in Saudi Arabia and the MENA (Middle East and North Africa) region, including sedans and sports utility vehicles,” the fund said in a statement last November.