Lucid Group (NASDAQ:LCID) stock rose 10% on June 27. CEO Peter Rawlinson teased more deals like one recently signed with Aston Martin (OTCMKTS:AMGDF).
Lawrinson believes Lucid can earn cash by supplying technology as well as selling electric vehicles (EVs).
Earlier this week, Lucid agreed to share its powertrain and battery technologies with Aston Martin for cash and an equity stake of 3.7%.
Lucid is expected to open June 28 at about $6 per share, down about 2% for 2023.
Saudi Financial Power
The American company produced only 2,314 cars in the first quarter of 2023. It is being held up by Saudi money. The Kingdom recently led a $3 billion capital raise, with an investment worth $1.8 billion. Saudi Arabia’s Public Investment Fund (PIF) now owns 65% of Lucid.
The Saudis also likely directed the Aston Martin-Lucid deal through the PIF’s Aston Martin stake of roughly 20%. Aston Martin now plans, with Lucid’s assistance, to produce its own all-electric vehicles in 2025.
Lucid has also announced plans to begin producing cars in China as well as Saudi Arabia. The Kingdom has a $5.6 billion agreement with China’s Human Horizons, a Chinese EV company that has agreed to support a Saudi manufacturing hub.
The Aston Martin deal helped investors shrug off some bad news. Arizona Governor Katie Hobbs vetoed a plan to let out-of-state car buyers escape sales tax by taking delivery at Lucid’s Arizona factory. With Arizona’s state sales tax rate at 5.6%, the bill would have let buyers save over $4,700 on a Lucid purchase.
Lucid has also been reluctant to support the Tesla (NASDAQ:TSLA) plug that has increasingly become the de-facto North American charging standard at 480 volts. Rawlinson said he wants a 900-volt charging system.
LCID Stock: What Happens Next?
When you’re investing in Lucid, you’re buying what is essentially a Saudi Arabian company. The Kingdom, and its PIF, has a lot of cash, but its track record on investments is questionable.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
