Saudi Arabia, one of the world’s biggest oil exporters, is increasing its bet on electric vehicles with its sovereign wealth fund pouring more money into U.S.-based Lucid Motors.

The Public Investment Fund (PIF) – a favourite vehicle of the deeply controversial Saudi Crown Prince Mohammed Bin Salman – has been named as the anchor investor among a group of private equity backers including BlackRock

, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management.

Between them these firms are putting $2.5 billion into the company as part of a wider deal which involves Lucid joining the New York Stock Exchange via a reverse takeover of Churchill Capital Corp IV (the announcement was given a poor reception on the market). Churchill will provide $2.1 billion in funding as part of this. The transaction is expected to close in the second quarter of the year.

It is not clear how much each private equity firm is committing in the funding round, but the transaction values Lucid at around $24 billion.

The PIF announced its first investment of $1 billion in Lucid in September 2018. At the time the sovereign wealth fund said this would “provide the necessary funding to commercially launch Lucid’s first electric vehicle, the Lucid Air, in 2020.”

The sedan has yet to be launched, with the company now saying production and deliveries are due to happen in the second half of this year, with prices starting at $69,900. An SUV, currently dubbed Project Gravity, is due to be added to the line-up in 2023.

The company is hoping to deliver 20,000 cars next year, bringing in revenue of $2.2 billion. With the addition of new models, that will climb to 251,000 planned deliveries by 2026 and revenues of $22.8 billion. The company plans to post positive earnings before interest, tax, depreciation and amortisation (EBITDA) by 2024 and be free cash flow positive the following year.

The PIF’s involvement is not just motivated by a desire for a return on its investment, though. It is also involved in trying to lure more skills and investment into Saudi Arabia, to provide rewarding jobs for locals. A number of Saudi graduates have gained work experience at Lucid already, according to comments by PIF governor Yasir bin Othman Al-Rumayyan last month. And the PIF’s investment could in time lead to a Lucid factory being built in Saudi Arabia.



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