Last week, Tesla CEO Elon Musk revealed that Saudi Arabia's Public Investment Fund (PIF) could help provide the necessary funding to make the company private. But a new report hints that the PIF could invest its money into a different electric automaker.
Reuters has learned from sources that the PIF is in talks with Lucid Motors about a potential investment. The two have drawn up a term sheet where the PIF could invest more than $1 billion into Lucid Motors and become the majority stakeholder. One source adds that the first investment would only be for $500 million and that subsequent investments would only come if Lucid Motors is able to hit certain production milestones
The sources do caution that the talks may not result in a deal.
Despite the PIF having $250 billion in assets, Reuters says the fund has already made a number of substantial investments into other things such as a $45 billion investment into a giant technology fund. This leaves them with limited funds, which makes the deal with Lucid more appealing. Banks have estimated that Tesla could need up to $72 billion if Tesla pays the $420 per share announced by Musk a few weeks ago. However, the price could drop if current shareholders keep their shares in the private company.
Lucid Motors made a big splash in 2016 with the introduction of the Air. The model made some big promises such as having the interior space of a Mercedes-Benz S-Class and a max range of up to 400 miles on a charge. Lucid was planning to start production of the sedan this year in Arizona. But last year, the company pushed back production to 2019 as they needed to raise more funds.