Lucid Motors (NASDAQ:LCID) is expanding its reach even further. After a week of steady growth, the electric vehicle (EV) startup has announced a partnership with the King Abdulaziz City for Science and Technology (KACST). The Saudi Arabian-based government organization will collaborate with Lucid on projects, allowing the automaker to benefit from its services, products and research facilities. Arab News reports that Lucid plans to use all three for “dedicated research into advanced battery technologies and materials.” News of this development hasn’t boosted LCID stock yet, but shares have picked up momentum from their dip early today as markets opened.
This move to continue building its presence in Saudi Arabia is likely to help Lucid in the long term as the struggling EV producer mounts a comeback.
What’s Happening With LCID Stock
After initially falling during early trading hours today, LCID stock is back on an upward trajectory and recently pulled back into the green. As of this writing, it is up 0.95% and looks poised to continue climbing. Investors shouldn’t regard their initial reaction as an indication that the KACST partnership is bad news for Lucid. But let’s take a closer look at what’s likely to happen as a result.
So far, Saudi Arabia has embraced Lucid. As of this writing, the company’s two top institutional investors are the Saudi Arabian Public Investment Fund (PIF) and Ayer Third Investment, a subset of the PIF, which hold 1,374,700,298 shares and 1,652,848,946 shares of LCID stock, respectively. Late in March 2024, shares surged on news that Lucid had received a $1 billion cash infusion from the PIF.
Now, Lucid remains optimistic that its new partnership will continue to help it grow as the global EV market gradually rebounds. Faisal Sultan, vice president of the company’s Middle East division, issued the following statement on the agreement:
“Lucid’s goal is to inspire the adoption of sustainable energy by creating advanced technologies. This Memorandum of Understanding marks a key step towards achieving this vision, acting as a catalyst to advance and elevate the entire EV industry and inspire the adoption of sustainable transportation in support of the Kingdom’s vision for a more sustainable and diversified economy.”
Focusing on spurring growth through international expansion efforts could be exactly what helps Lucid rise above penny stock status in the second half of the year. After struggling amid high volatility, many experts have soured on LCID stock. But, through it all, the scrappy company has hung in there, and now it is slowly trekking back to the $5 mark.
Lucid’s Road Ahead
LCID’s recent positive momentum isn’t all due to the news of the KACST partnership. Lucid also stands to benefit from the buzz around its upcoming earnings report, scheduled for May 6. However, as far as long-term catalysts go, investors should pay close attention as Lucid begins its KACST research collaboration.
It’s also important to note that The Kingdom has also pledged to purchase “up to 100,000 vehicles” from Lucid over the next decade. That number could easily grow as the brand’s popularity continues to spread in Saudi Arabia, an EV market that is expected to continue growing steadily over the next few years.
On the date of publication, Samuel O’Brient did not have (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.
