Saudi Arabia invests $1bn in Tesla competitor Lucid
Saudi Arabia invests $1bn in Tesla competitor Lucid
September 17, 2018
Saudi Arabia on Monday announced it has signed off on a
$1 billion investment in US carmaker Lucid Motors with the aim of helping the
Tesla rival roll out electric cars.
The Public Investment Fund, which invests on behalf of
the Saudi government, said the outlay was aimed at funding the commercial
launch of the Lucid Air model in 2020, pending regulatory approvals and closing
conditions.
Saudi Arabia, the world's largest exporter of oil and a
crucial US ally in the Middle East, has pushed to diversify its economy since
the 2014 crude market crash.
The kingdom faces a budget deficit of more than $260
billion and has borrowed over $100 billion to help finance the shortfall.
The PIF has committed to $95 billion in investments in
the past two years from firms like British tycoon Richard Branson's space
tourism company Virgin Galactic to high-risk tech firms such as Tesla.
Tesla chief executive Elon Musk disclosed last month that
he was in talks with Saudi Arabia's PIF and other investors to take the
electric automaker private.
Musk said in a blog post on August 13 he had "no
question" that the Saudis would finance such a transaction following a
July 31 meeting.
He also revealed the PIF had bought almost five percent
of Tesla stock through public markets.
His comments sparked speculation over whether he would
need to borrow massive amounts of money to take Tesla private, a move that
could allow the company to operate without requirements for financial reports
and other pressures of a publicly traded firm.
They also raised questions about whether Musk ran afoul
of securities laws by claiming backing without a firm financial commitment.
Tesla shares dropped some 1.9 percent in New York on
Monday.
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