PIF-backed Lucid Motors to be made in Saudi as it competes with Tesla on the road to success

Analysis PIF-backed Lucid Motors to be made in Saudi as it competes with Tesla on the road to success
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Updated 08 September 2021

PIF-backed Lucid Motors to be made in Saudi as it competes with Tesla on the road to success

PIF-backed Lucid Motors to be made in Saudi as it competes with Tesla on the road to success
  • Saudi Arabia's Public Investment Fund has invested $1 billion into Lucid Motors
  • Yet the firm is struggling to take on rival Tesla

US-based electric car maker Lucid Motors will produce vehicles in Saudi Arabia by 2024, as the battle for dominance in the fledgling sector ramps up in the Middle East.

The announcement of a factory being built in the Kingdom was made on Tuesday, with Saud Al-Askar, deputy governor of the Saudi Standards, Metrology and Quality Organisation, telling Al-Arabiya TV the paperwork on the deal was being finalised.

The move comes after Saudi Arabia's Public Investment Fund poured $1 billion into the company in April 2019 - giving it a 67 per cent stake in the firm.

Yet even with the funding, Lucid will be in a tough position to match the success of high-profile electric vehicle (EV) rival Tesla.

Lucid Motors’ flagship Lucid Air model, priced at over $70,000, is due to launch early next year but has received only 11,000 orders to date.

That’s about half as many Teslas have been sold every month in the US alone this year, and just under 388,000 cars in total were sold in Saudi Arabia in 2020.

Next year, the Lucid has a production target of just 20,000 cars.

Peter Rawlinson, chief executive officer of Lucid Motors, recognises that the firm has some way to go in challenging Tesla, and said: “Tesla is in its pre-ascent position because it recognised that electrification is a technology race."

Lucid hopes to win the EV race on efficiency, with the firm claiming its vehicles will be 40 percent more efficient than any other electric car, travelling 17 percent further for the same size battery pack as the Tesla Model S long range.


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Designed to achieve more range, its battery enables 4.6 miles of travel per kilowatt hour of power, meaning a Lucid car has a range of more than 500 miles on a single charge, compared to about 400 miles for the Tesla Model S.

But despite recent drops in battery prices, electric vehicles still cost more than their internal combustion counterparts. Pre-tax, batteries account for 25 percent to 35 percent of a vehicle's retail price.

Sue Magnusson, director of CMF design at Lucid Motors says that the company also hopes to stand out from its rivals due to its design philosophy.

“The use of sustainably sourced materials is an integral part of Lucid’s design philosophy. At every step, we must ask suppliers where the raw goods come from, how they’re harvested, how the factories are run and how they address the safety of their workers.

“Many manufacturers hold a standard that everything must be about quality and craftsmanship. Although an important part of what we do each day, we must also believe that reaching the highest standards in these areas without considering the impact of the processes and materials we use isn’t nearly enough. 

“Across the entire electric car realm, sustainability should be a mission, not a phase,” she wrote in a column for Arab News in August that talked about the sustainably sourced leather, wood, polyester, and wool used in the Lucid Air’s interior.

Two other more expensive Lucid versions have also been announced, costing over $169,000. The Dream Edition Performance is designed for speed and acceleration, while the Dream Edition Range, is designed to maximise range.

Production was limited to 500 of these cars, which quickly sold out earlier this year.

Manufacturing them here in the Kingdom would be a significant win for the economy, employment, and the Vision 2030.

PIF already has a six-month internship program commencing in January that Saudi graduates can apply for, involving working at Lucid Motors’ US offices in California, Newark, and Arizona.

Although a fleet of Mercedes EQ electric cars are believed to be in use at NEOM, there are currently no electric cars sold in Saudi Arabia - only hybrid models - nor is there any charging infrastructure for them, apart from few locations like the one of the malls in Jeddah, an auto industry source told Arab News. 

No legislation has yet been put in place in relation to the infrastructure, Arab News understands.

There are no battery disposal or recycling facilities in the Kingdom either, the source said.

While that is the case, there will be a long road ahead for electric car ownership here. Something that is expected to change with more Lucids cars on the road in Saudi Arabia and elsewhere.

Wall Street set for gains as traders scale back rate hike expectations

Wall Street set for gains as traders scale back rate hike expectations
Updated 24 June 2022

Wall Street set for gains as traders scale back rate hike expectations

Wall Street set for gains as traders scale back rate hike expectations
  • US stock indexes eye first weekly gain in four
  • Bank stocks mixed after Fed’s stress test results
  • Futures up: Dow 0.68 percent, S&P 0.72 percent, Nasdaq 0.77 percent

REUTERS: Wall Street’s main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation.

Global financial markets have been roiled this month on worries that rapid rate hikes by major central banks could cause a sharp economic downturn, with the benchmark S&P 500 confirming a bear market last week as it recorded a 20 percent drop from its January closing peak.

Data on Thursday showed US business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak.

Sliding commodity prices also quelled worries about red-hot inflation, with copper prices heading for their biggest weekly fall in a year and crude oil set for a second weekly decline.

“Conversations about the US economy likely slowing which could lessen the hawkishness of the Fed, combined with lower commodity prices and bond yields — these are reasons investors are mentioning to justify why we could experience a near-term bounce,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

“Yet, I do not think that it’s the final bottom.”

The Fed’s commitment to fight high inflation is “unconditional,” Chair Jerome Powell told lawmakers on Thursday, a day after saying it was not trying to provoke a recession but that was “certainly a possibility.”

The main stock indexes looked set to notch their first weekly gain in four, with health care, real estate and utilities — among sectors considered as safer bets during times of economic uncertainty — outperforming so far in the week.

Market heavyweights such as Apple Inc. and Tesla rose 0.9 percent and 0.5 percent in premarket trading. Rising interest rates have hurt shares of the mega-cap growth companies as their valuations rely more heavily on future earnings.

At 08:45 a.m. ET, Dow e-minis were up 208 points, or 0.68 percent, S&P 500 e-minis were up 27.5 points, or 0.72 percent, and Nasdaq 100 e-minis were up 90.25 points, or 0.77 percent.

The University of Michigan’s survey on US consumer sentiment in June and new home sales data will be published later in the day.

FedEx Corp. rose 3.4 percent after the parcel delivery company issued a stronger-than-expected full-year profit forecast despite softening global demand for shipping.

Bank stocks were mixed after the Federal Reserve’s annual “stress test” exercise showed that the lenders have enough capital to weather a severe economic downturn.

Citigroup Inc. slipped 0.9 percent and Bank of America Corp. edged lower, while Morgan Stanley gained 1 percent.

Zendesk Inc. soared 28.1 percent after the software company said it would be acquired by a group of buyout firms led by Hellman & Friedman LLC and Permira in a deal valued at $10.2 billion.

Saudi Arabia strengthens position as largest Arab economy: Report

Saudi Arabia strengthens position as largest Arab economy: Report
Updated 24 June 2022

Saudi Arabia strengthens position as largest Arab economy: Report

Saudi Arabia strengthens position as largest Arab economy: Report

RIYADH: Saudi Arabia’s share of the Arab economy grew 0.4 percentage points in 2021, as it retained its position as the region’s largest economic player.

The Kingdom recorded a domestic output of $833.5 billion last year, the equivalent of 29.7 percent of the entire Arab region, according to a report of the Arab Corporation for Investment and Export Credit Guarantee, Dhaman.

The UAE was the second largest Arab economy, with $410 billion — 14.6 percent of the total, while Egypt ranked third, with a production of $402.8 billion.

Dhaman Director General Abdullah Ahmed Al-Sabeeh expects continued growth in 2022, especially after the value of foreign projects imported to the region increased by 86 percent to reach $21 billion during the first quarter of 2022, compared to the same period in 2021.

The report showed that the Arab economy as a whole, outperformed the eighth largest economy in the world, Italy, with a gross domestic product of $2.1 trillion.

Foreign direct investment grew in the region, with inflow increasing by 43 percent year-on-year, equal to about $53 billion.

This brought the FDI total to around $1.58 trillion.

Those inflows represent 6.3 percent of incoming flows to developing countries and 3.3 percent of global flows.

More than 96 percent of the increased inflows are concentrated in just five countries, led by the UAE with $20.7 billion, and followed by Saudi Arabia with $19.3 billion.

Egypt came in third place with a value of $5.1 billion, followed by Oman in fourth place with a value of $3.6 billion, Morocco in fifth place with $2.2 billion worth of inflows, Dhaman annual monitoring data showed.

FDI balances received by Arab countries increased by the end of 2021 from $958 billion to more than $1 trillion in 2021, according to UNCTAD data.

For the total amount received, Saudi Arabia topped the Arab ranking with $261 billion, representing 26 percent of the Arab total, followed by the UAE with $171.6 billion, and Egypt with $137.5 billion.

Saudi Makkah, Madinah to see 110,000 new hotel rooms by 2030: Colliers

Saudi Makkah, Madinah to see 110,000 new hotel rooms by 2030: Colliers
Updated 24 June 2022

Saudi Makkah, Madinah to see 110,000 new hotel rooms by 2030: Colliers

Saudi Makkah, Madinah to see 110,000 new hotel rooms by 2030: Colliers

RIYADH: Saudi Makkah and Madinah are expected to see the addition of 110,000 rooms by 2030 to cater for Hajj pilgrims, a report has claimed.

Over 100,000 rooms are expected to be supplied across the Gulf Cooperation Council area by 2026, with the total supply estimated to exceed 1 million rooms, Colliers International said.

The large majority will be in Saudi Arabia, followed by the UAE.

Some 700,000 individuals would be employed in the hotel sector in Saudi Arabia and UAE, the key regional markets, to facilitate this increase.

If planned mega projects in Makkah and Madinah are taken into account, these projects would require approximately 50,000 further skilled and trained hospitality professionals by 2030, the consultancy said.

As part of its localization drive, the Kingdom has mandated that at least 30 percent of the staff employed has to be Saudi.

While all front desk and managerial roles have to be assigned to Saudi nationals only, technical roles are still fulfilled by expatriates, the report said.

Key source markets for recruiting staff include Philippines, Egypt, and South Asian Subcontinents like India, Pakistan and Nepal.

The GCC will likely need to employ more than 90,000 professionals in the hospitality sector by 2026, with 82,000 of them working in Saudi Arabia and the UAE, Colliers said.

There were 894,700 rooms supplied across the GCC in 2021, an increase of nearly 387,000 rooms over the past decade, with 70 percent concentrated in Saudi Arabia, it said.

Saudi Arabia has historically been the center for religious tourism and pilgrimage for Muslims, according to Colliers.

UK-GCC trade deal could be finished in a year: Minister

UK-GCC trade deal could be finished in a year: Minister
Updated 24 June 2022

UK-GCC trade deal could be finished in a year: Minister

UK-GCC trade deal could be finished in a year: Minister

RIYADH: UK trade talks with the Gulf countries would be concluded in 12 to 18 months, Britain’s Minister of International Trade Anne Marie Trevelyan has revealed. 

The UK has started talks on a free trade agreement with six Gulf countries in the latest round of negotiations aimed at strengthening its relations outside the EU after its exit.

“It is difficult to determine the time period for discussing free trade agreements, but we believe a period of one to one and a half years is a realistic time period and we have identified it as a starting area,” she told Al Arabiya.

The Gulf Cooperation Council visions work to help the business sector grow, use digital tools to help emerging companies find new markets, and to diversify the economy away from oil and gas in the long term, Trevelyan said.

“We want to make sure that with the removal of obstacles to food, beverages and other goods, we will see companies in both directions benefit,” she said. 

She added: “It is also important to support the flow of investments in both directions, and we want to see the investment flowing between our countries grow more so that companies in UK, Saudi Arabia, UAE and Kuwait, Oman and Bahrain to work closely together to the fullest extent, in order to be able to achieve the visions, and it was really exciting to see the developments during my visit, and that these opportunities for companies not only for our generation, but for future generations.”

UK-US trade agreement

As well as countries in the Gulf, the UK is also in talks with the US, pending President Joe Biden administration's readiness to negotiate a federal trade agreement, Trevelyan said.

“I and a number of ministers are working with a number of US states on topics such as mutual recognition of qualifications and governor-controlled policies to help our companies increase trade and remove some of the existing barriers,” she said.

Trevelyan added: “We look forward to a federal agreement, but President Biden wanted to focus his efforts internally in his first year, and we respect that decision.”

“I'm working with my counterparts to remove barriers to market entry, and we have a resolution on the steel fees and a resolution on the fees related to the Boeing-Airbus dispute. We have done a lot and are waiting for the Biden administration to be ready to begin the federal agreement,” she said.

Saudi Arabia Finance Minister calls on OPEC to fund green transformation

Saudi Arabia Finance Minister calls on OPEC to fund green transformation
Updated 24 June 2022

Saudi Arabia Finance Minister calls on OPEC to fund green transformation

Saudi Arabia Finance Minister calls on OPEC to fund green transformation

RIYADH: Saudi Arabia’s Finance Minister has called on the Organization of the Petroleum Exporting Countries to fund more green transformation projects, in the wake of oil giant Aramco pushing ahead with solar and wind energy developments.

Speaking at the ministerial meeting of the OPEC Fund for International Development in Austria, Mohammed Al-Jadaan warned no country will be able to grow without the availability of reliable energy sources,

Addressing the meeting in Vienna, Al-Jadaan said: “Security of energy supplies, economic development, and addressing the climate change challenges are crucial and parallel axes to ensure the growth and prosperity of countries.”

OPEC has proven in recent years its reliability in providing stability to energy supply and maintaining global economic health, Al-Jadaan said.

He added that the recent fuel shortfall was largely driven by a lack of refining capacity followed by investment in energy capital expenditures.

His words came amid reports that Aramco will plow money into Saudi Arabia’s national renewable energy programme as it aims to invest in 12,000MW of renewable energy by 2030.

Those investments will likely primarily come in the form of investments in Public Investment Fund’s solar and wind projects.

“We will use the allocation of renewable energy credits from these investments towards decarbonising the power supplied to our operations,” it said.

Aramco is also expected to expand off-grid and grid-connected solar and wind energy solutions as an important source of low-carbon energy for its operations, similar to its adoption of cogeneration facilities to boost energy efficiency.  

The Minister of Finance touched on the efforts of the Fund regarding global strategic development challenges, such as the climate change program and the energy transition, as well as the looming food crisis.

He praised the initiative announced by the Fund at the meeting of the Arab Coordination Group regarding the $10 billion support for the food security joint work plan.

Al-Jadaan signed a memorandum of understanding the Fund on the sidelines of the ministerial meetings, as part of the ministry's keenness to provide opportunities for Saudis to work for regional and international organizations.

The Fund was established in 1976 with the aim of strengthening cooperation among member states to help poor, low-income countries increase their economic and social growth.