Over the next decade, the largest shareholder in the company will buy 100,000 electric vehicles.
The Public Investment Fund of Saudi Arabia, which is connected to the kingdom, has an option to purchase an additional 50,000 vehicles over the course of 10 years. In after-market trading, the shares popped 5%.
The pledge includes future models such as the upcoming Gravity SUV, as well as the luxury sedan the Lucid Air that was launched last year. The vehicles will come from Arizona and a future assembly plant in Saudi Arabia. The Saudi kingdom's Vision 2030 plan seeks to reduce fossil fuels in its economy.
The Public Investment Fund of Saudi Arabia invested $1 billion into the company. The investment agreement came just six weeks after Musk said on his verified verified account that he was considering taking the company private at $420 a share. Saudi Arabia's wealth fund was interested in backing the company's move from public to private, according to Musk.
The investment came at a time when Lucid was in need of funds to produce the Lucid Air. PIF held onto its investment when the company became a publicly traded company. PIF holds over one billion shares of Lucid.
It appears that the purchases will begin this year, despite the fact that agreements with decades-long timelines can fail to provide an immediate sales boost. The order quantity is expected to increase to between 4,000 and 7,000 vehicles annually by the year 2025. The deliveries will start in the second quarter of 2023.
It is not clear what the kingdom will pay for the vehicles. The kingdom will get the cheaper price when comparing MSRP in the U.S. and Saudi Arabia, according to legal jargon tucked into the announcement.
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