Lucid Motors has officially opened the first-ever EV manufacturing plant in Saudi Arabia. The EV maker announced Wednesday the facility will produce Lucid Air vehicles for the country while exporting to overseas markets.
“We are delighted to make history today in Saudi Arabia by opening the country’s first car manufacturing facility,” Lucid’s CEO Peter Rawlinson said at the inauguration.
After receiving its operating license to begin production in Saudi Arabia last week, Lucid officially opened the doors to the first car manufacturing facility in the nation Wednesday.
Lucid’s second Advanced Manufacturing Plant (AMP-2) and first international plant will produce electric models for Saudi Arabia and other overseas markets.
The new EV manufacturing plant is located in one of Saudi Arabia’s “economic megacities.” Saudi Arabia launched four new Special Economic Zones (SEZs) in April. These SEZs offer incentives such as lower corporate tax rates, tax-free machinery and raw materials imports, easy setup, labor access, and more.
Lucid is considered an anchor investor in The King Abdullah Economic City, located on the Red Sea.
Lucid expands with new EV manufacturing plant
Lucid’s new EV manufacturing plant (AMP-2) has already begun semi-knocked down (SKD) assembly and is expected to produce 5,000 cars annually in the first phase.
Initially, Lucid will reassemble Air electric sedans pre-built at its AMP-1 facility in Casa Grande, Arizona.
The EV looks to transition the facility in the future to handle complete production after the middle of the decade. Once finished, Lucid expects to have about 150,000 annual EV capacity at its new manufacturing plant.
Located on the Red Sea, the location offers access to overseas markets, with 13% of global trade passing through the region.
Lucid’s new manufacturing plant received significant support from the Saudi Arabian government as it’s expected to play a key role in the country’s mission to diversify its economy.
As part of its “Saudi Vision 2030,” the Kingdom looks to raise the share of non-oil GDP from around 16% currently to 50% by the end of the decade.
Last year, Lucid announced a deal with the Saudi government to purchase up to 100,000 EVs over 10 years. The nation has initially committed to buying 50,000, with the option of purchasing an additional 50,000 during the same period.
Lucid’s new EV manufacturing plant in Saudi Arabia could be more significant than it seems.
The nation’s Public Investment Fund (PIF) invested an additional $1.8 billion into the EV maker in June, bringing the total to around $9 billion in funding. At the end of June, Saudi Arabia’s PIF owned 60.5% of Lucid’s common stock.
With a manufacturing facility plant in the country, Lucid is now invested. It could act as a sort of collateral to keep the Saudi government invested in the company. In other words, it could be what keeps Lucid afloat.
In the US, Lucid slashed prices by up to $12,400 following lagging demand. According to recent Experian data, Lucid had 348 registrations in July, bringing the total to 3,789 for the year.
Of the 26 EV brands in the US, Lucid placed 18th with 0.6% of the share as it faces stiff competition in the luxury market.
An overseas manufacturing base may act as a catalyst for the company to reach new overseas markets while expanding the brand internationally.