This is the Tesla rival that’s wooing the Saudis

David Welch
Bloomberg News
A startup hopes Saudi money will help it launch its Lucid Air car.

It’s an electric-car maker. It’s in the news. No, it’s not Tesla Inc.

Lucid Motors, a startup co-founded 11 years ago by a Silicon Valley veteran, is in the spotlight following news reports over the weekend that Saudi Arabia’s sovereign wealth fund would be willing to invest $1 billion in it, possibly as an alternative to playing a key role in taking Tesla private.

Regardless of what the Saudi Public Investment Fund does with Tesla, its $250 billion war chest could get Lucid’s Air electric car into production.

“The Lucid Air is legitimate technology and very well designed,” said Eric Noble, president of consulting firm The CarLab. “They have a stellar team, they just need money.”

Funding would be a welcome new lease on life for Lucid, which had been trying to raise a series D round of $700 million last year to get a plant up and running in Arizona.

Lucid was co-founded by Sam Weng, who came from software maker Oracle Corp., and two partners as a maker of battery systems. The company has since assembled a team recruited from Mazda and Tesla, including Chief Technical Officer Peter Rawlinson, who was chief engineer of Tesla’s Model S before joining in 2013.

When Lucid showed the Air as a concept car at the New York auto show in 2017, Rawlinson said that the car would start at a base price of $60,000, or $52,500 after federal tax credits. Air’s motor can produce the equivalent of 400 horsepower and run 240 miles on a charge, the CTO said. Lucid also planned on a higher-end, 1,000 horsepower version that can drive 400 miles on a charge will be much more expensive, selling for “well north of $100,000,” Rawlinson said at the time.

Lucid has no updated information on the car on its website. The company didn’t return an email seeking comment, and Rawlinson didn’t answer a call seeking comment.

News of the Saudi PIF’s interest in Lucid was one factor weighing on Tesla stock Monday. Some investors feared that it signaled declining interest from the sovereign wealth fund in helping Tesla CEO Elon Musk take his company private. Musk, who announced his intention in a surprise tweet on Aug. 7, said last week that he met with the Saudis on July 31 and after he felt confident that they would play a key role in his plan to take the company private.

The Saudi PIF has a mission to invest in new technology and diversify both its portfolio and the Saudi economy away from oil and gas. Sovereign wealth funds often have more patience than public markets and could wait for the technology to be ready for the market, he said.