Saudi Arabian sovereign wealth fund earlier this month was reported in talks with Elon Musk to buy a piece of Tesla and now it seems that they have turned their sights to Tesla’s close rival, Lucid Motors.
The Saudi fund has just drawn up a term sheet to invest USD500 million in Lucid. It could invest up to USD1 billion to acquire majority ownership in the electric carmaker after Lucid meets certain production targets.
Silicon Valley-based Lucid says it is developing an electric luxury sedan called the Lucid Air that some have called the Model S 2.0. Lucid was founded as Atieva Motors in 2007 by an early Tesla VP and board member, Bernard Tse, and a partner, Sam Weng. It started by building batteries for electric buses, cars, and motorcycles.
It is clear that Lucid is a considerably more affordable option for the Saudi fund, which is worth about USD250 billion whereas estimates for the amount needed to take Tesla private range from USD10 billion to USD72 billion, depending on how a deal is structured, the role of Tesla’s existing debt, and how many investors might be interested in buying the company.
The Lucid Air is a little shorter than the Model S yet has more room inside. Top-trim versions offer reclining lounge-like rear seats. The Lucid Air is said to offer a maximum range of 400 miles and a pair of electric motors deliver up to 1,000 horsepower. The proposed selling price is reported to start at USD64,000 for a 240-mile, 400-hp version.
