Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, signed a more than $1 billion (Dh3.67bn) investment agreement with the US-based Lucid Motors, that will help the electric car maker commercially launch its first vehicle by 2020.
PIF, which is an investor in Tesla, has made the investment through its wholly-owned special-purpose vehicle, the fund said in a statement on Monday. The two parties have made “binding undertakings” to carry out the deal, which is subject to regulatory approvals, it said.
The deal is part of PIF’s international investment strategy, which will provide necessary funding for launching Lucid’s first electric vehicle, the Lucid Air. The company plans to use the funding to complete engineering development and testing of the Lucid Air, construct its factory in Arizona and begin production for the global rollout of the car, starting from North America.
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“By investing in the rapidly expanding electric vehicle market, PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development and driving revenue and sectoral diversification for the kingdom,” a PIF spokesperson said.
The fund’s international investment strategy aims to strengthen its position an investor in the industries of the future and become the partner of choice for international investments, the spokesman said, adding that “investment in Lucid is a strong example of these objectives”.
The PIF is at the heart of the Saudi Arabia’s economic diversification programme as the kingdom seeks to cut dependence on oil revenues to fuel its economy. The fund in the last few years has been actively building stakes in local and international firms. PIF, along with Abu Dhabi’s strategic firm Mubadala Development Company, is part of the core investor group in Japanese SoftBank Group’s $93bn Vision Fund, which invests in technology sectors such as artificial intelligence and robotics.
The latest investment in Lucid, PIF said also supports the kingdom’s Vision 2030 to build a sustainable future economy that is environmentally-friendly. The fund over the past twelve months, has made invests in in renewables and utilities, recycling and energy efficiency services companies.
The fund, which manages assets of $250bn, in July, increased its shareholding in Riyadh-based renewables developer Acwa Power, taking it close to 25 per cent, with its latest 15.2 per cent direct stake in addition to its existing 9.78 per cent stake through its wholly-owned subsidiary Sanabil Direct Investments Company, PIF said at the time.