Saudi Tesla backers could be about to invest in EV rival

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If Elon Musk – the entrepreneur seen by many as holding the key to making electric vehicles mainstream – was emotional last Thursday, when explaining how tough it is being the world’s most attention-seeking CEO, he should probably steer clear of the latest headlines emanating from the Middle East.

With the Zawya.com news portal reporting the Saudi sovereign wealth fund Musk is expecting to help him take his Tesla EV company private has played down expectations of such a huge financial commitment, there was more disconcerting news on that front this morning.

Zawya today carried a report – based on quotes from “people familiar with the matter” – that the Saudi PIF investment vehicle is not only reluctant to help fund the $66 billion or so needed to take Tesla back into private hands, it is also embarking upon a $1 billion drive to take a controlling stake in EV rival Lucid Motors.

However a Bloomberg article written on Sunday, August 12 about the rumors surrounding Musk’s privatization plans stated the Saudis have not made a decision either way, but are in talks about a possible investment, with that report also based on anonymous sources.

According to Middle East news site Zawya, PIF is, however, all set to pump an initial $500 million into Newark, California-based Lucid – co-founded by ex-Tesla VP Bernard Tse in 2007 – with that figure potentially doubling in two further tranches, dependent on the carmaker hitting targets, and with PIF taking a majority holding as a result.

Lucid could begin production this year

Zawya’s report does, however, include the caveat: “The talks between PIF and Lucid Motors may not result in a deal.” In response to a request for details from pv magazine, a spokeswoman for Lucid Motors this afternoon said the company does not comment on its fundraising activities.

Lucid is reportedly taking deposits from customers for its planned first battery-powered model, the $100,000 Lucid Air sedan it has previously stated would begin production in Arizona towards the end of this year.

The company has already secured backing from the Chinese state-owned Tsinghua Capital as well as private institutions in Japan, the U.S. and now, reportedly, Saudi Arabia.

PIF acquired a 5% stake in Tesla earlier this year, prompting Musk to reveal it would be contributing to the huge amount of cash required to take Tesla back into private hands. Shares in the high-profile electric carmaker wobbled again at the end of last week though, after the CEO broke down during a interview on Thursday with the New York Times in which he opened up about the effects on his health of running the perennially loss-making company.

The Times may be back knocking on his door soon.

This article has been updated to include the response from Lucid Motors and, at 15.04 on 20.08.2018, to include reference to the Bloomberg article stating PIF is still open to helping fund Musk’s privatization plan.