That is a condition for receiving investments from its Public Investment Fund (PIF).
On January 7, we told our readers that Lucid was planning to build a plant in Saudi Arabia. Bloomberg discovered that the car company was discussing that with one of its main investors, Public Investment Fund (PIF). That’s the country’s sovereign wealth fund. Now, The Wall Street Journal discovered this facility was in the plans since 2018. Lucid would have promised to build it to receive investments.
Although it was pretty clear that the move would only be justified due to Lucid’s main investor's wishes, it is always relevant to have a confirmation that this was really the case. Saudi Arabia has no manufacturing tradition and always lived well on petrodollars until very recently – when climate change became a global concern.
As The Wall Street Journal reminds us, the lack of tradition is not the only liability involved with doing business with Saudi Arabia. The Crown Prince Mohammed bin Salman is accused of having ordered the assassination of the journalist Jamal Ahmad Khashoggi in Istanbul on October 2, 2018, at the Saudi Arabian Consulate in Istambul, Turkey.
Khashoggi went there to get the documents he needed to get married. Sadly, Lucid’s promise to build a factory in Saudi Arabia would have happened in the same year, a few months prior to the journalist’s murder.
With worldwide condemnations for such actions, multiple Western businesses decided to avoid working with Saudi Arabia, which was not that difficult. In Lucid’s case, that is not really a choice. Apart from that, the factory is most certainly going to be funded by PIF. Lucid would just get in the business with its know-how and trying to convince suppliers to establish there as well. If that fails, it will have to import a reasonable amount of components.
The Wall Street Journal would have learned about that promise from multiple sources. They claim at least one big investor in Lucid’s SPAC merger was informed about that promise and that Lucid will have a Saudi Arabian factory as a fact. That confirms the previous Bloomberg report about the 2018 promises in exchange for the investments.
There’s still no official confirmation from Lucid about the factory. We also have no idea if it will be in Jeddah or Neom, both cities with ports to the Red Sea, which would help export the production. Curiously, Neom is also under construction. Khashoggi was born in Medina, a city more to the interior of the country.