Saudi Arabia-based public investment fund is reportedly looking to invest in Lucid Motors, a Newark, CA-based electric car maker which is also a rival of Elon Musk’s Tesla.
The amount of the fund is expected to be more than $1 billion and the fund ownership of the company will be transferred as stated by the reports. Under this particular deal, the fund will provide an initial investment of $500 million and then make two subsequent investments if Lucid hits certain production targets.
Lucid Motors was established in 2007 by Sam Weng (former Oracle executive) and Bernard Tse (former Tesla vice president). The companies that have backed Lucid include Venrock and Tsing Capital. Unlike Tesla, the company has yet to release any cars on the open markets.
However, the previous year Lucid launched a prototype sedan, Lucid Air, which has 400 horsepower and a starting price of $60,000. The car is expected to be available in sometime around 2019.
This partnership will help both the companies in their respective fields and also help them to grow in every aspect. But, this may prove to be a threat to Musk’s Tesla, which already appears stressed. It was earlier reported that Musk is taking Tesla private for $420 per share, or about $72 billion.
Musk further made clear that the Saudi Arabia wealth fund, which owns a 5% stake in Tesla, was the potential backer. However, no formal agreement had been made in this regard. The company is now supposedly facing a subpoena from the SEC and lawsuits from investors that allege Musk’s tweet that was aimed to increase the company’s stock price.