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Lucid Group Inc., which rolled out its Arizona electric luxury vehicle plant in 2021, on Sept. 27 said it had opened its first international manufacturing facility in Saudi Arabia, as the oil-rich nation joins the rest of the globe in a move away from production of cars that emit greenhouse gases.
Newark, California-based Lucid (Nasdaq: LCID) had unveiled plans last year for the new factory, near the seaport city of Jeddah. In April of this year, Lucid said that the Saudi government had inked a deal to buy as many as 100,000 vehicles from the company over 10 years.
The new plant in Saudi Arabia arrives a few months after Lucid pared down its headcount in Casa Grande — roughly an hour south of downtown Phoenix — where it manufactures electric vehicles.
Reuters reported that Saudi's sovereign wealth fund is tasked with driving the kingdom's ambitious plan, known as Vision 2030, to reduce reliance on oil revenue as it ventures into an EV industry dominated by China and the United States. Saudi's Public Investment Fund, which owns more than 60% of the U.S.-based EV company, in May agreed to invest $1.8 billion as part of a private stock offering by cash-hungry Lucid in May.
To back up its move into the EV sector, Saudi Arabia announced in 2022 that it would invest some $6 billion to build an EV battery metals plant and steel plate mill, Reuters previously reported. And last November, the Saudis said a new joint venture with Taiwan electronics manufacturer Foxconn would begin work on new lower-priced EV models under the brand name Ceer to target the European, Middle East and African markets.
The Wall Street Journal reported earlier this month that EV industry leader Tesla (Nasdaq: TSLA) was also in early discussions to set up a Saudi Arabia manufacturing plant.
Lucid's Saudi plant initial capacity is 5,000 units
Lucid's AMP-2 facility in King Abdullah Economic City — about 60 miles north of Jeddah — will assemble the company's flagship Lucid Air vehicle, with an initial capacity to produce 5,000 units a year. The site will be scaled up to produce as many as 155,000 units down the road.
“As Saudi charges toward its Vision 2030, our facility will pave the way for the country’s electric automotive industry and the expansion of the supply chain, and with the support of the Saudi government, we are proud to drive local talent development in the technology industry. We look forward to delivering Saudi-assembled cars to customers in Saudi Arabia and beyond,” said Peter Rawlinson, Lucid Group's CEO and chief technology officer, in a statement.
Through an agreement with Human Resources Development Fund, Lucid said it expects to employ hundreds of Saudi nationals in the first few years and eventually grow the workforce into the thousands.
Lucid has struggled to increase sales during 2023.
In February, the company recalled hundreds of its Lucid Air sedans due to a design flaw that caused the cars to lose power and potentially crash. Then a month later, Lucid laid off 1,300 employees — a majority of whom worked in Casa Grande — as part of a company reorganization.
And in August, Lucid reported its second quarter financials, which fell short of Wall Street expectations. Looking ahead, Lucid is also planning to introduce more affordable electric cars to challenge Tesla, Barron's reported at the time.
