The Saudi Arabia’s sovereign wealth fund announced Monday that it has signed an investment agreement worth more than $ 1 billion with Lucid Motors to finance Lucid Motors’ 2020 commercial launch of its first electric vehicle, the Lucid Air.
The deal is a major win for Lucid, the electric car startup that aims to compete with Tesla, which has languished over the last year as it failed to secure the funding necessary to start making its luxury electric cars. Lucid plans to manufacture its cars in Casa Grande. News of the deal with Saudi Arabia comes weeks after Saudi Arabia purchased 5 percent of Tesla.
More than a year since its initial announcement, Lucid Motors announced on April 25th that production of vehicles in Casa Grande, Arizona will begin in two years.
The city was left in limbo for approximately 18 months as Lucid sought to secure $700 million in Series D funding. The two-year time frame comes from the estimated time and cost it will take to begin producing the Lucid Air model at the Casa Grande facility.
The electric car manufacturer secured an extension on the option to buy the land needed for the factory in mid-April. Pinal County Manager Greg Stanley said the county would potentially be the buyer of the 500 acres Lucid has chosen for its factory and then lease it to developers short-term.
Series D funding comes after the previous phases of funding such as raising seed capital followed by Series A, B and C. Typically C is the final round, but for companies looking to raise more capital and gain more investors, another round of funding can be implemented. Richard Wilkie, director of economic development for the city of Casa Grande, said Lucid Motors’ facility would add to the city’s growing reputation,
“(Lucid) helps draw more interest to other companies that may not necessarily be related to the automotive field, but because you have these types of high-quality jobs that would be created,” he said.
Lucid Motors has been short on cash in the past, but delays have not negatively impacted the city financially, Wilkie said.
“These types of projects take time, they don’t happen overnight,” he said. “This is next generation collector’s vehicle, they have autonomous technology in it, it is the wave of the future.”
The city is ready to go, Wilkie said. “If they came in tomorrow and provided us plans, we’d be ready to go.”
The initial announcement to build a factory in Casa Grande came with a proposal of approximately 2,000 new jobs and a new curriculum for the Advanced Manufacturing Technology Program at Central Arizona College.
The year-long program has been designed for graduates to enter the workforce immediately in areas of advanced technology, said Advanced Technology Division Chairwoman Kristen Benedict. Since the announcement of the partnership with Lucid Motors, “we’ve seen a growth of the program by 1,300 percent,” Benedict said regarding the number of applications from students for the Advanced Technology Manufacturing Program alone.
“We’re seeing an alignment amongst the state on curriculum and all the colleges on the Sun Corridor will be offering the same curriculum,” she said.
Even with the delay of Lucid’s arrival, Benedict said she does not see wavering in the students’ interest desire to be in the program. The program is applicable to other manufacturing industries, which means the program’s need will not go away either, according to Benedict.
Stanley expressed the city’s eagerness and excitement for Lucid’s arrival saying it could potentially reduce long work commutes for many residents. “The county’s workforce is about 170,000, about 50 percent of that workforce travel outside of the county to places like Phoenix and Tucson,” he said.
“The economic benefits will be tremendous,” Stanley said.
“We have over 25 health-care related specialists in the community, we’re the health-care hub of Pinal County,” he said. “We have advanced manufacturing; we have Hexcel, which is an international company—they’ve been in the community over 40 years.”
Hexcel is one of the largest producers for the commercial aerospace industry and is among some other large corporations in Casa Grande like Frito Lay and Abbott Nutrition.
Wilkie said the proximity to the Interstate 8 and 10 as well as two major airports—Phoenix Sky Harbor International and Phoenix-Mesa Gateway—puts the area in a good position.
“That’s what makes us so enticing for these large, Fortune 500 companies to put distribution centers,” he said.
According to Wilkie, Lucid Motors could prompt more residents, new housing and a growth in food, entertainment and retail sales.
“You see a direct benefit with the jobs being created,” he said.