EV FORDISM

Lucid (LCID) Opens Car Manufacturing Plant in Saudi Arabia

Zacks Equity Research
Thu, September 28, 2023


Lucid Group, Inc. LCID opened its first international plant in King Abdullah Economic City, Jeddah, Saudi Arabia. This is Lucid’s second Advanced Manufacturing Plant (AMP-2), which will produce electric vehicles (EVs) for Saudi Arabia and other markets.

The AMP-2 is backed by the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund and the Economic City at King Abdullah Economic City. The facility will play a crucial role in Saudi Arabia’s vision of diversifying its economy.

Peter Rawlinson, CEO and CTO of Lucid Group said that the facility will produce Lucid’s award-winning electric vehicles and pave the way for Saudi Arabia’s electric auto industry and the expansion of its supply chain.

Per the company, the AMP-2 facility is expected to assemble 5,000 cars annually. In its initial stage, the facility will re-assemble Lucid Air vehicle kits that are pre-manufactured at Lucid’s AMP-1 plant in Casa Grande, AZ. Lucid plans to add an annual capacity of 150,000 EVs in the future.

The location of the plant will act as a catalyst for the growth and expansion of its domestic supply chain. Jeddah is located on the coast, which offers it strong supply chain access by land and sea and will help Lucid export EVs to other markets in the future.

A year ago, the government of Saudi Arabia announced to purchase 100,000 EVs from Lucid over a ten-year period. The government made an initial commitment to purchase 50,000 EVs, with the option to purchase another 50,000 vehicles over the same time-frame. The deal includes Lucid Air and future models like Gravity SUV.

In 2018, when Lucid was private, Saudi Arabia’s Public Investment Fund invested $1 billion in the company. The investment helped Lucid start producing its first EVs.

In the last reported quarter, Lucid delivered 1,404 vehicles, up from 679 vehicles in the corresponding quarter of 2022. The company is on track to produce 10,000 vehicles in 2023.

Zacks Rank & Key Picks

LCID currently carries a Zacks Rank #3 (Hold).

California-based EV maker Lucid opens first-ever auto plant in Saudi Arabia
Tom Foster
Wed, September 27, 2023 

Romain Maurice/Getty Images for Haute Living

Californian EV-maker Lucid has opened the first ever car manufacturing plant in Saudi Arabia, as the kingdom looks to establish itself as a global player in the EV race.

Lucid officially opened the plant in King Abdullah Economic City, near Jeddah, on Wednesday. The factory — the company’s first international plant — will initially focus on re-assembling vehicle kits sent over from the United States.

“With the support of the Saudi government, we are proud to drive local development in the technology industry,” Lucid CEO Peter Rawlinson said in a statement. “We look forward to delivering Saudi-assembled cars to customers in Saudi Arabia and beyond.” Saudi Arabia’s powerful Public Investment Fund (PIF), controlled by the Saudi government, is Lucid’s largest shareholder.

The Saudi government also has an agreement with Lucid to purchase up to 100,000 vehicles from the company over a 10-year period.

The new factory will initially deliver Lucid vehicles that have already been put together at the company’s first factory in the United States, then disassembled for shipping, then re-assembled at the plant in Saudi Arabia. While the factory initially has an annual production capacity of just 5,000 vehicles, the company says it intends to begin from-the-ground-up production at the Saudi factory “after the middle of the decade,” with an additional annual capacity of 150,000 vehicles.

Saudi Arabia wants 30% of new car sales in the kingdom to be electric by 2030. The country has looked to electric vehicles as a way to boost its manufacturing sector as it faces an inevitable decline in demand for the oil it has relied upon, and has courted other western companies in the EV industry in the hope of diversifying its economy.

In 2022, the PIF set up a state-backed EV brand, called Ceer, which last month announced a deal with Siemens on designing and building electric cars. Earlier this month, The Wall Street Journal reported that Saudi Arabia had also held talks with Tesla over an EV factory in the kingdom. Tesla CEO Elon Musk dismissed the reports, however, saying they were “utterly false.”

For Lucid, the Saudi factory milestone comes during a turbulent period for the company, whose shares have struggled since its IPO in 2021. In March, the company laid off around 18% of its workforce as part of a cost-cutting plan. Lucid shares are down more than 60% over the past 12 months.