Saudi Arabia owns more than half of Lucid Motors

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California EV startup Lucid Motors gave up majority possession to Saudi Arabia’s sovereign wealth fund in alternate for the $1.three billion funding it closed final 12 months, in keeping with an e-mail from the corporate’s attorneys that was included in a lawsuit filed on Wednesday.

The lawsuit was filed by Lucid Motors’ former head of finance, Doug Coates, who believes he’s entitled to sure severance advantages primarily based on the language of the deal he signed with the corporate. Coates argues he’s eligible for these advantages as a result of the Saudi Arabia funding triggered a “Change in Control” clause in his settlement with Lucid Motors as a result of it resulted in “a change in the majority shareholder of the Company,” in keeping with an e-mail from his lawyer to the startup despatched final 12 months. That means Saudi Arabia’s Public Investment Fund (PIF) owns greater than 50 % of the corporate’s shares.

Lucid Motors disagrees on the severance facet of issues, however the firm mentioned in response to the e-mail from Coates’ lawyer that it “does not dispute that the financing transaction that closed on or about April 2, 2019 would appear to constitute a Change of Control.” Wired Middle East beforehand reported the PIF had taken a 67 percent stake, however the e-mail included within the lawsuit is the primary time an acknowledgment from the corporate has been made public. That mentioned, it stays unclear precisely what sort of voting rights the varied shareholders of the corporate have. The firm declined to remark.

Saudi Arabia first introduced the deal again in September 2018 — simply weeks earlier than Saudi Crown Prince Mohammed bin Salman had Washington Post journalist Jamal Khashoggi killed. Khashoggi’s loss of life precipitated some corporations like Richard Branson’s Virgin Galactic and Virgin Orbit to stroll away from taking the Kingdom’s cash or take a second take a look at the nation’s lengthy historical past of human rights abuses. Many scheduled attendees of that 12 months’s Future Investment Initiative convention (generally known as “Davos in the Desert”) backed out. But Lucid Motors has remained partnered with Saudi Arabia ever since, regardless of the deal not formally being accepted by the US authorities’s Committee on Foreign Investment within the United States until April 2019.

In reality, throughout an interview with The Verge final November, Lucid Motors CEO Peter Rawlinson implied that his startup would be capable of affect the Kingdom — not the opposite manner round.

“I think that we can be part of a movement which could catalyze change for good. That’s what I see,” Rawlinson mentioned on the time. “We have a partnership — which is very aligned — a partnership with the PIF. It’s a strategic partnership. They’re committed to help us make this change to benefit all mankind. And it will benefit Saudi society.”

“Lucid is part of the solution, and not the problem,” he added.

Lucid Motors isn’t the one futuristic transportation firm with ties to Saudi Arabia, which has been centered on investing in new applied sciences as a part of Mohammed bin Salman’s Vision 2030 plan. Virgin Hyperloop One — a separate entity from Branson’s house endeavors — is doing a examine with the Kingdom to see what sort of presence the startup may construct there. Formula E, the primary international all-electric racing collection, took a whole lot of tens of millions of {dollars} from Saudi Arabia to host races within the Kingdom. Virgin Hyperloop One CEO Jay Walder, Formula E founder Alejandro Agag, and Rawlinson additionally all appeared on the subsequent Davos within the Desert final October whereas many different corporations and executives stayed away.

Saudi Arabia can also be a serious investor in Uber and had very early conversations about funding Tesla in 2018 earlier than CEO Elon Musk exaggerated the talks by tweeting he had “funding secured” to take his firm personal, which led to a battle with US monetary regulators. Saudi Arabia has plowed $45 billion in SoftBank’s huge Vision Fund, too, which has made a plethora of investments of its personal.

Founded in 2007 as Atieva, the California EV startup was initially centered on being extra of a provider within the budding world of electrical automobiles. But the corporate finally rebranded as Lucid Motors in 2016 and set its sights on making a luxurious electrical sedan referred to as the Air, and employed Rawlinson, the previous lead engineer of Tesla’s Model S, to run the undertaking.

Lucid Motors bumped into funding bother shortly after that and needed to tackle loans from an Arizona hedge fund and a Chinese electrical bus firm to outlive, as The Verge beforehand reported. It finally began discussions with Saudi Arabia in 2018, and when the deal lastly closed in 2019, Rawlinson changed Atieva co-founder Sam Weng as CEO.

The startup is now constructing a $700 million manufacturing facility in Arizona, the place it plans to place the Lucid Air into manufacturing on the finish of this 12 months. The closing manufacturing model of the sedan might be unveiled on September ninth.