Clearly, long before SPAC, Saudi car factory promised to build

Last month, Lucid agreed to merge a special acquisition company, a deal that, if completed, would allow it to trade publicly later this year. The merger agreement valued the Silicon Valley start-up at approximately $ 24 billion.

Lucid has not publicly discussed the Saudi car factory’s plans, but according to people familiar with the discussion, at least one major institutional investor who has agreed to invest as part of the SPAC deal has been informed about them.

A Lucid Motors spokesperson said it “expects to set up manufacturing facilities in multiple regions in the coming years, including Asia-Pacific, the Middle East and possibly Europe.” The spokesman said the company’s “short-term priority” will begin production at the Arizona plant later this year.

Churchill Capital spokespersons Corp.

CCIV 10.73%

IV, the SPAC that agreed to merge with Lucid, and PIF did not return requests for comment.

Churchill Capital is run by former Citigroup Inc.

investment banker Michael Klein. He has worked as a financier in the Middle East for years, advising Saudi Arabia on the local stock exchange listing of Saudi Arabian Oil in 2019 Co.

or Aramco.

PIF, a Saudi Arabian state investment fund, first agreed to invest more than $ 1 billion in Lucid in 2018. It has agreed to boost that investment through Lucid’s SPAC merger, and it recently provided the automaker with $ 600 million in bridge financing stability through the close of the deal, Lucid Chief Executive Officer Peter Rawlinson told The Wall last month. Street Journal. PIF will remain Lucid’s majority shareholder once it lists its SPAC deal, the company has announced.

Originally named Atieva, Lucid was founded in 2007 as a battery technology company before devoting itself to making its own cars. In 2013 it recruited Mr. Rawlinson, formerly of Tesla Inc.,

where he was chief engineer of the company’s first mass-produced luxury sedan Model S. Lucid hasn’t sold any cars, but analysts say is one of the most mature electric vehicle start-ups in a race to ever compete with Tesla. The company plans to sell its first model, a luxury sedan called the Air, later this year.

Lucid recently completed the first phase of a $ 700 million factory in Casa Grande, Ariz., Which the company says is capable of making 34,000 cars annually. With expansion, the site can increase production to 365,000 vehicles per year, the company said. In a presentation to investors, Lucid said it plans to produce more than 500,000 vehicles annually by 2030.

Lucid’s SPAC deal comes amid a deluge of similar deals between specialty acquisition companies, also known as blank checks, and startups looking to quickly tender their shares. Merging with a SPAC, essentially a large pool of cash already listed on an exchange, allows companies to bypass the more typical initial public offering process.

Some people familiar with the Saudi factory promise said such an investment could cost hundreds of millions of dollars or more. Saudi Arabia has little of the manufacturing footprint needed to build cars, meaning that many of its auto parts will likely need to be imported. That, according to these people, could potentially double the production costs in the factory.

Clear executives have pushed for more Saudi incentives to cover costs and offset the inefficiencies building the plant would cause, these people said. Senior PIF executives are encouraging the company to deliver on their 2018 commitment, these people said.

PIF, led by Crown Prince Mohammed bin Salman, had begun to invest the country’s oil wealth internationally with the aim of making investments that could reduce the Saudi economy’s dependence on the petrochemical industry. Many of the fund’s bets were explicitly aimed at attracting direct investment to Saudi Arabia, hoping to create jobs for young Saudis in growth sectors such as technology and advanced manufacturing.

Those efforts stalled because many Western companies distanced themselves from Saudi Arabia after the murder of Mr Khashoggi in 2018. The murder took place after the PIF invested in Lucid that same year. Last month, the US released a report blaming Crown Prince Mohammed for ordering the murder. Prince Mohammed has said the murder occurred on his watch, but he has not said he ordered it.

Saudi officials, in particular, have been trying to entice a carmaker to build an assembly plant in Saudi Arabia for nearly a decade. Jaguar Land Rover, owned by the Indian Tata Group, signed a letter of intent with the government in 2012 to evaluate the feasibility of a Saudi assembly plant. The plant was never built.

—Mike Colias contributed to this article.

Write to Summer Said at [email protected] and Ben Foldy at [email protected]