Lucid to buy 100,000 electric vehicles from Saudi Arabia

Electric carmaker Lucid Group Inc on Tuesday said it has signed an agreement with the government of Saudi Arabia for the purchase of up to 100,000 of its vehicles over the next 10 years.

Saudi Arabia commits to purchase 50,000 vehicles under the agreement, with an option to buy an additional 50,000 vehicles during the ten-year time frame, Lucid said in a statement. Lucid shares rose 5.4 percent in extended trading following the announcement.

The deal marks the latest tie-up between the California-based EV company and Saudi Arabia, whose Public Investment Fund is Lucid’s largest shareholder, with about a 61 percent stake in the company.

Lucid, which currently manufactures its vehicles at a plant in Arizona, also plans to build its first overseas production factory in Saudi Arabia later this year, where it expects to eventually manufacture up to 150,000 vehicles per year.

The vehicles bought by the Saudi government are expected to come from both factories, Lucid said.

Delivery of the vehicles is expected to start no later than 2023, with order numbers initially ranging from 1,000 to 2,000 annually, and increasing to between 4,000 and 7,000 starting in 2025.

A Lucid spokeswoman said the company has not offered discounts for any vehicles under the agreement.

Lucid in a regulatory filing said the Saudi government would pay either the U.S. or Saudi retail price, whichever is lower, in addition to import and other delivery costs.

The automaker, which looks to compete with Tesla Inc, in February cut its 2022 production forecast from 20,000 vehicles to 12,000 to 14,000 vehicles this year due to supply chain challenges.

It began deliveries of its $169,000 Lucid Air premium sedan in the United States in October, and said it expects to deliver to Canadian customers beginning this spring.