Saudi investment fund reportedly wants stake in Lucid MotorsSaudi investment fund reportedly wants stake in Lucid Motors

The Saudi Arabian sovereign wealth fund may be planning to buy a stake in potential Tesla rival Lucid Motors, according to a Reuters report.
Tesla CEO Elon Musk suggested last week that he had held talks with the same Saudi investment fund.
The report says that the fund has drawn up a term sheet to invest $500 million in Lucid. It could invest up to $1 billion to acquire majority ownership in the electric carmaker after Lucid meets certain production targets.
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The report cited “people familiar with the matter.”
 
Silicon Valley-based Lucid says it is developing an electric luxury sedan called the Lucid Air that some have called the Model S 2.0.
The Lucid Air is a little shorter than the Model S yet has more room inside. Top-trim versions offer reclining lounge-like rear seats.
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The Air is said to offer a maximum range of 400 miles and a pair of electric motors good for up to 1,000 horsepower. The price is reported to start at $64,000 for a 240-mile, 400-hp version.
Lucid was founded as Atieva Motors in 2007 by an early Tesla VP and board member, Bernard Tse, and a partner, Sam Weng. It started by building batteries for electric buses, cars, and motorcycles.
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It’s not clear whether the Saudi fund’s investment in Lucid could come instead of any Tesla deal or potentially in addition. Reuters notes that Lucid is a considerably more affordable option for the Saudi fund, which is worth about $250 billion, but has other investment commitments.
Estimates for the amount needed to take Tesla private range from $10 billion to $72 billion, depending on how a deal is structured, the role of Tesla’s existing debt, and how many investors might be interested in buying the company.
Lucid Air electric luxury sedan prototype [photo: David Noland]
A New York Times report over the weekend noted that Musk was considering having his other giant company, SpaceX, make an investment in Tesla, which could reduce the amount of cash needed from other investors.
Although Musk said in his letter to shareholders that the manager of the Saudi fund “strongly expressed his support for funding a going-private transaction for Tesla at this time,” and, “I understood from him that no other decision makers were needed and that they were eager to proceed,” no evidence has emerged of the Saudi fund conducting due diligence into making such an investment in Tesla or of any terms being laid out.
Lucid Air
The news that the fund is seeking an investment in Lucid confirms that the Saudis are interested in investing in an electric carmaker to diversify their oil holdings at a time when electric cars are poised to make a serious dent in demand for oil. 
Lucid is one of several startup companies planning to introduce new luxury electric cars in the next couple of years.

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