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Saudi wealth fund plunges $1bn into Tesla rival Lucid

18 September 2018

Saudi Arabia's sovereign wealth fund invested over $1 billion Monday in an American electric auto manufacturer just weeks after Tesla CEO Elon Musk earlier claimed the kingdom would help his own firm go private.

Lucid said Monday that it had executed a $1 billion investment agreement with the fund, subject to necessary regulatory approvals. The Saudi fund had previously built up a stake of just under 5 per cent in Tesla.

"It's all the capital we need for three things: to continue the development of the vehicle, to construct the factory in Arizona, and to initiate the rollout of our global retail strategy and that will commence in the USA because that's our first market", he said. "Our investment in Lucid is a strong example of these objectives".

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The investment will fund Lucid Motor's 2020 commercial launch of its first electric vehicle, the Lucid Air, Reuters reported. "At Lucid, we will demonstrate the full potential of the electric-connected vehicle in order to push the industry forward", he said.

Saudi Arabia's 33-year-old Crown Prince Mohammed bin Salman has talked about using the country's PIF to help diversify the economy of the kingdom, which relies nearly entirely on money made from its oil sales. On Monday, Lucid and the Saudis made it official. The company wants to make up to 130,000 vehicles per year by 2022.

Tesla chief executive Elon Musk disclosed last month that he was in talks with Saudi Arabia's PIF and other investors to take the electric automaker private. The Securities and Exchange Commission is reportedly investigating Musk's disclosure on Twitter. Experts say regulators likely are investigating if Musk was truthful in the tweet about having the financing set for the deal.

Saudi wealth fund plunges $1bn into Tesla rival Lucid