Pinal County To Purchase 500 Acres Of Land For Future Use By Lucid Motors

8 months ago by Eric Loveday 36

The 1,000 hp, 400 mile electric Lucid Air ... just out testing the structural integrity of rickety old bridges everywhere

The 1,000 hp, 400 mile electric Lucid Air … just out testing the structural integrity of rickety old bridges everywhere

Lucid Motors’ promise to begin production of the Lucid Air electric car in 2018 (full car details/reveal here) hinges on securing land in Arizona and building a factory there to make its car a reality.

Lucid Air

Lucid Air

As of right now, Lucid doesn’t own any land to build a factory on, but that should change sometime later this month when the Pinal County Board of Supervisors meet to figure out how to purchase some 500 acres of land that it will later lease to Lucid for its planned $700 million factory.

As Phoenix Times explains:

“The  Pinal County Board of Supervisors will hold a meeting next month to consider raising taxes to fund a multimillion-dollar purchase of land for would-be electric-car maker Lucid Motors.”

“The estimated financing cost for the land is $73.4 million: $31.8 million in principal, plus $41.6 million in interest.”

It’s expected that Lucid will lease the land from the county for awhile prior to purchasing it outright in some 5 years’ time at a price that’s profitable for the county. This will reduce the financial load on Lucid initially as the automaker gets the ball rolling. Later, when/if Lucid runs into some funds, the land-purchase agreement will be drawn up.

Another bridge crossed by the Lucid Air

Another bridge crossed by the Lucid Air

Phoenix Times adds that Lucid Motors is seeking multiple state subsidies too.

Now this bridge seems a little more EV supercar-approved

Now this bridge seems a little more EV supercar-approved.

• $5 million in grant money over five years, dependent on meeting specified job-creation and capital-investment milestones.

• $1.5 million in grant money for job training. The company would pay for the cost of training employees and the state would reimburse 75 percent of the cost over two years.

• $40 million in refundable tax credits under the Qualified Facility Tax Credit Program the legislature created in 2012.

It seems like mid January is the target date to finalize the land deal and to announce any subsidies that will be given to Lucid, so we’ll know soon enough how this is all going to play out.

Source: Phoenix Times

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36 responses to "Pinal County To Purchase 500 Acres Of Land For Future Use By Lucid Motors"

  1. Someone out there says:

    Strange how everyone needs to build new factories. Are there no old, disused factories they can take over? That would be a lot cheaper I would assume.

    1. reijer says:

      I think this has not the possibility to make the factory highly efficent, what is needed to get the batteries cheaper

      1. James says:

        Tesla remodeled an old factory and I think they are doing quite well, ha. I think it has more to do with the ego of the owner than anything else, and Lucid isn’t making their own batteries. Pinal county is not a place with any experienced factory workers, either, unless you count the retirees who worked in factories.

      2. Pushmi-Pullyu says:

        It’s the setup of the assembly lines inside the factories, and the machines and workers on those lines, which makes a factory highly efficient… or not. It’s not the walls, ceiling, and floors. At worst, you’d have to throw out all the old machinery and install all new ones. But in reality, there would likely be at least some things which could be salvaged, if it’s an abandoned auto assembly plant.

        At worst, using an abandoned factory means you don’t have to wait for the land to be cleared and the building to be built. It’s also likely that buying an abandoned factory would be cheaper than erecting a new building. So why not jump start the process by using an existing building, so long as it’s in an area with a sizable untapped labor pool? That is, an area in which a lot of blue-collar workers are out of work.

        Unfortunately, there are plenty of those to be had these days in “rust belt” States.

    2. Daniel says:

      I hear that the Packard Motor company factory facility in Detroit is vacant lol. Could probably be had for a few dollars..

    3. Pushmi-Pullyu says:

      “Someone out there” said:

      “Strange how everyone needs to build new factories. Are there no old, disused factories they can take over?”

      That is exactly what I was going to post here. Tesla bought an abandoned auto assembly plant for its first large factory, and recently the EV startup Rivian did the same. Why are so many EV startups planning to build an assembly plant from scratch? Are there no other abandoned auto assembly plants in “right to work” States the USA?

      Color me baffled.

    4. Nix says:

      When you buy an old factory, you also own any environmental cleanup that the previous owners didn’t clean up.

      Does it have a huge underground oil or chemical tank that has been leaking for 40 years? You own the cleanup.

      Was the factory used to make something with asbestos, and is asbestos impregnated into every surface? You own the cleanup.

      In order to avoid liability, you have to go through the EPA brownfield program:
      https://www.epa.gov/brownfields

      Not everybody wants the hassle.

      1. Some Guy says:

        Not to mention that old abandoned factories were usually rotting away for some time (often many years) with zero maintenance, meaning that integrity of the structure may be affected. Also, building might not be up to code anymore (fire exits missing, asbestos insulations, PCB and other nasty stuff built in).
        Last but not least: Does the surrounding area allow for possible future growth? At Tesla’s factory, grwoth options are there but not unlimited, due to other buildings and infrastructure at the sides of the property.

  2. GeorgeS says:

    I live in az. I will be surprised if this happens given the current political climate…ie extreme right wing. Maybe some state incentives but not the Pinal couny land purchase.

    1. James says:

      We do have the tag tax break for pure EV’s, which is quite generous, but not sure if that will last. I don’t hold out serious hope for a factory of any kind in Pinal county, though, as it is. It’s place filled with skilled labor.

    2. Daniel says:

      I too live in Arizona and agree 100% the extremists here or what used to be called conservatives have gone off the rails and are in the weeds. Not a good political climate here for green anything. Tesla still can’t sell here.

  3. Ken_3 says:

    Chrysler had one near St.Louis. It was bulldozed down after it sat vacant for a couple of years.

  4. CDAVIS says:

    “…The Pinal County Board of Supervisors will hold a meeting next month to consider raising taxes to fund a multimillion-dollar purchase of land for would-be electric-car maker Lucid Motors…The estimated financing cost for the land is $73.4 million: $31.8 million in principal, plus $41.6 million in interest.”
    —–

    So why is Pinal County making a big American tax dollar spend to help finance a Chinese owned company? This would never happen going the other way in China. It’s time American tax payers stop financing foreign interests whose trade & foreign-investment policies are not balance (designed to only serve their own interest).

    1. Yogurt says:

      They are only part Chinese acording to wiki…
      “The company is financed by Tsing Capital, Sumitomo, Venrock, LeEco, JAFCO, and others,[3][4] providing $131 million by 2016.”
      Sumitomo is the second largest bank in Japan and Venrock is the Rockefellers venture capatalist firm…

      1. James says:

        From what I understand the IP is all Chinese owned, which is not good, as I don’t see this company succeeding with only an overpriced sedan.

      2. CDAVIS says:

        The complex structure of Licid Air (including core IP retained in a decoupled special purpose Chinese Co ) is designed to keep Lucid Air beneficially Chinese owned. I’m open to hear any argument to the contrary.

        1. Asoue says:

          Do you have a source for this info? Has never been published as far as I’m aware. In fact, there are articles with the company on record stating it is not majority owned and is an American company.

          1. CDAVIS says:

            Billionaire Jia Yueting’s $1.8B Play To Build A Chinese Challenger To Tesla: http://www.forbes.com/sites/michaeldunne/2016/08/12/chinese-billionaire-jia-yueting-leecos-1-8-billion-ev-investment-8-questions-answered/#5b2a81d52236

            “Ownership of the company, whether it is called Atieva or Lucid, is murky. Apparently, its principal investor is Jia Yueting, the Chinese billionaire who is also the force behind LeEco, a Chinese electric car start-up that says it will offer the LeSEE electric sedan in the Chinese market soon…as well as China’s Beijing Auto [a Chinese state-owned enterprise]” -Source: http://gas2.org/2016/10/22/now-atieva-changes-name-lucid-motors/

            1. Asoue says:

              Absolutely nothing is mentioned in those sources regarding core Lucid IP being property of a separated Chinese company. You sir have this mixed up with FF.

              http://www.engadget.com/amp/2016/12/22/faraday-future-could-be-out-of-business-by-february/

              And everything else you claim at this point can be now considered speculation.

              1. CDAVIS says:

                @Asoue –
                I may be wrong, but perhaps a Google patent search crossed referenced with a Google corporate search may show that Atieva USA, Inc. (renamed to Lucid Motors) is a Delaware corporation which is a wholly owned subsidiary of Atieva, Inc., a Cayman Islands company. The patents are under the Cayman Island Co…not the Delaware Co.

                Although perhaps my prior post of “decoupled special purpose Chinese Co” should have instead said “decoupled special purpose Chinese *owned* Co”

  5. Death from above says:

    I am a Pinal County resident and I would rather move out of Pinal County than pay for a potential 500 million dollar mistake. Pinal County has been broke for 10 years and to consider an investment such as this as they are finally coming out of financial hardship is insane. What happens to Pinal County and the 500 million dollar land purchase if Lucid Motors does not make it as a start-up company? Bankruptcy! Only 10-20% of new startups ever succeed. That is a known fact. When it comes to auto makers in 2011 NBC did a report on 10 new companies of those 10 new companies I only recognize two, Tesla and Gem. That means 80% from this 6 year old NBC report potentially failed. That is too great a risk. Why not let them find the private investment capital they need and give them some leeway on taxes to get started. We cannot hold the Board of Supervisors personally financially responsible unless we can prove negligence. Well I think this would be a negligent act!

    1. CDAVIS says:

      @ “I am a Pinal County residenT…”
      ——

      Get a Stop Petition started…organize like minded residents…go door-to-door to get petition signed…reach out to local tv & paper news on the petition drive.

      Also start an online petition and spread through social media: https://www.ipetitions.com/

      If this giving away American tax money to Chinese foreign interest goes through it will be because of the inaction of the Pinal County residents.

    2. Yogurt says:

      500 million gamble??
      Only a 73 million dollar gamble and not even that much as the county owns the land and could re sell it or reporpose it as a future Tesla Giga factory for one…

    3. Pushmi-Pullyu says:

      “Death from above” said:

      “What happens to Pinal County and the 500 million dollar land purchase if Lucid Motors does not make it as a start-up company? Bankruptcy! Only 10-20% of new startups ever succeed.”

      Well said, sir.

      It makes sense for a Municipal or State government to give a tax abatement to a startup, in order to provide new jobs for the area. It makes far less sense to actually give a wannabe company hard-earned taxpayer dollars, which — as you rightly point out — would be wasted when the company goes bankrupt, as is more likely than not to happen.

      If I recall correctly, the State of Nevada in negotiating with Tesla, for the Gigafactory project, did give Tesla some tax credits which it could sell to other companies, and so earn actual cash for Tesla. But even there, the State of Nevada didn’t actually give Tesla tax money which had already been collected.

      I think that States and Municipalities which are considering spending tax money to attract new businesses should carefully examine the offer Nevada used to attract Tesla. IMHO that is the model which should be used, rather than giving any money directly to the startup.

  6. Assaf says:

    Same comment as for the NextEV story.

    The auto industry seems to have one of the biggest concentrations of herdlike, idiotic executives and financiers.

    Everyone wants to compete with Tesla on the luxury market, copying the first part of Tesla’s business model (with no intentions to follow to the next parts), only 15 years late, with none of the talent and the vision, and usually about a billion dollars short.

    Whoever gives these lemmings a penny or a square foot, is not only wasting their resources but also doing a disservice to the cause of EVs.

    1. wavelet says:

      ++
      It seems to have escaped all the johnnie-come-latelies’ notice that there are virtually no more independent luxury car brands anymore. It’s impossible to achieve decent RoI on a small number of modern vehicles sold, no matter how expensive, unless the luxury brand is backed by a larger group and reuses its tech for the most part. It may be a bit easier for BEVs, but not by much.

      The known “marques” have for the most part been passed around like hot potatoes, but at least have name recognition to help. Why would a rich snob buy a completely unknown brand?

    2. Pushmi-Pullyu says:

      @Assaf:

      You have a point about these new EV startups being insufficiently funded; it takes a few billion (with a “B”) dollars to start a new auto manufacturing business.

      But otherwise, your comments are waaaaaay off base. Successful companies, like Tesla, spawn imitators. Always have, always will.

      And sometimes the “fast followers” can be more successful than the pioneer, because they can avoid making the same mistakes the pioneer did. And heaven knows that Tesla made plenty of mistakes in its early years!

      Now, that doesn’t mean I’m predicting Lucid will succeed. Most startups fail, in every type of business, and competing with existing auto makers in the USA is exceptionally hard.

      But asserting that wannabe auto makers should not try to follow Tesla, and throwing insults and pejoratives at them when they do, is denying reality pretty hard. Following Tesla will be very difficult, but at least it’s possible. Companies like CODA and Th!nk show what happens when an EV startup aims down-market, where failure in making a limited production car is not merely likely — it’s guaranteed.

  7. MikeG says:

    Who would pay $636,000 per acre for land in Arizona. Is land scarce there? Whose land are they buying–a Pinal county commissioner, perhaps?

    1. Ocean Railroader says:

      I have looked at land in Nevada and Arizona and could buy 80 acres of land for a $100,000.

      If they are going to spend $636,000 a acre then that is a rip off. in that $636,000 should be able to buy that land with that cost.

    2. Daniel says:

      Well the land might be more expensive because it needs to ideally be situated near existing infrastructure so you don’t have to build roads and power lines and gas lines and Sewer lines and everything else out to a property in the middle of nowhere which would probably need rail to for shipping

      1. Pushmi-Pullyu says:

        Yes, but $636,000 per acre for unimproved land in Arizona sounds like someone is lining their pockets; or more likely, several someones. If the land in that particular place is that expensive, then they should find an alternate location.

        1. Pushmi-Pullyu says:

          Oops. As Loek pointed out, it’s actually $63,600 per acre, which is much closer to what I think unimproved land in Arizona should cost.

          Thanks, Loek!

  8. Loek says:

    @mikeg

    You added a zero.

    $64,000

  9. Yogurt says:

    So the land will cost 73 million and Lucid plans to buy it from the county at a profit for the county…
    Then they get a whopping 46.5 million in grants and tax credits…
    Is that it??
    That is absolute chump change after Nevada gave Tesla 1.3 billion in tax subsudies not to even metion what CA is giving Tesla…

    1. Pushmi-Pullyu says:

      A reality check of your logic there shows null content.

      Here’s the reality: The county is putting up $73.4 million to purchase land for the benefit of Lucid, in the hope that Lucid will be able to repay the county in some years, but that will only happen in the unlikely event that Lucid is a financial success. As it takes about two years just to build a new factory and fine-tune it for mass production, Lucid’s plan to start selling its car in 2018 is pretty obviously not realistic.

      Contrast with Tesla: The State of Nevada granted Tesla some tax abatements, and also some transferrable tax credits, which would be given to Tesla over time, and only to the extent that Tesla met its promises to hire workers in Nevada. Also, if I recall correctly, Tesla was either given the land for the Gigafactory or was allowed to buy it at a greatly reduced price; this was a deal from the land developer who — correctly — bet that Tesla putting the Gigafactory there would increase the value of the surrounding land. If that’s right, then no tax money was used to help Tesla buy the land for the Gigafactory.

      I think the State of Nevada made a very good, savvy deal with Tesla. The State did use some of its own funds to build an extension of the highway to link to the site, and did pay for some other improvements; but those improvements would have to be made anyway, to serve the industrial park at the location.

      It looks very much to me as though the deal that the State of Nevada made with Tesla is one that Nevada can’t lose on. Contrariwise, Pinal County, AZ will most likely lose most or all of that $73.4 million. Odds are that within a couple of years or so, Pinal County will be desperately advertising for a new “anchor” for the property, after Lucid either goes bankrupt or abandons its plans to build a factory there.

      Of course, we EV advocates hope Lucid will succeed and that Pinal County’s bet will pay off, but if I was a Pinal County taxpayer, I’d find that bet to be extremely unwise.

  10. ReRe says:

    I say go for! Just my opinion