Saudi Wealth Fund to Invest $1-B in Tesla’s Rival Lucid
Saudi Arabia’s PIF (sovereign wealth fund) signed an agreement to invest more than $1-B in aspiring US electric-car maker Lucid Motors Inc., a private company, months after building a stake in rival Tesla (NASDAQ:TSLA).
The deal would give Lucid the funding to take it through to the commercial launch of the Silicon Valley-based startup’s 1st EV, the Lucid Air, in Y 2020, the Public Investment Fund said in a statement.
Saudi Arabia, the world’s biggest Crude Oil exporter, has been diversifying its economy after the decline in Crude Oil prices. As part of the plan, the Kingdom plans to turn the PIF into the world’s biggest sovereign fund, controlling more than $2-T by Y 2030, and hedge against Crude Oil.
The deal between PIF and Lucid adds to the uncertainty surrounding Tesla, whose CEO Elon Musk tweeted on 7 August that he had secured funding to take the firm private in the ‘420’ transaction.
Mr. Musk later backtracked his Tweet, while saying the Saudi wealth fund had expressed interest in helping take Tesla private. The Saudi fund has built up a stake of 4.9% in Tesla.
“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 of Saudi Arabia,” according to the PIF statement.
Last year, PIF announced plans to invest as much as $45-B in a technology fund run by Japan’s SoftBank Group Corp., put $20-B into a US infrastructure fund managed by Blackstone Group LP (NYSE:BX), and build a $500-B city called Neom on the Red Sea. The Kingdom’s PIF raised a loan of $11-B this week.
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