Lucid selects Saudi Arabia as the home for its first international factory

28 February 2022, 23:23:39

Lucid selects Saudi Arabia as the home for its first international factoryThree years ago, we reported that Lucid Motors is pondering on building a factory in Saudi Arabia. After overcoming many financial ordeals, today Lucid announced its long-term plan to bring, indeed, "advanced automotive manufacturing to Saudi Arabia." The company has signed agreements with the Ministry of Investment of Saudi Arabia ("MISA"), the Saudi Industrial Development Fund ("SIDF"), and the Economic City at King Abdullah Economic City ("KAEC"), as it lays the groundwork for a full production factory in Saudi Arabia. The agreements are expected to accelerate Saudi Arabia's strategic goal to transform and diversify its economy through the development of sustainable energy and transportation. Lucid estimates that the location of Lucid's first international manufacturing plant in the Kingdom of Saudi Arabia may result in up to $3.4 billion of value to Lucid over 15 years, and the facility will enable Lucid to address the growing demand for Lucid's products.

Lucid reviewed multiple opportunities before selecting KAEC in Saudi Arabia as the optimal location and opportunity for its first international manufacturing facility. The new manufacturing hub will be fully owned by Lucid and enable the company to meet growing international demand for luxury electric vehicles. Lucid also expects to benefit from the availability of competitively-priced commodities and energy and a newly emerging domestic supply chain, and a factory location that facilitates global logistics. The company further expects to be able to access financing to build and equip the manufacturing facility and to train automotive workers.

Lucid plans to establish operations at KAEC for re-assembly of Lucid Air vehicle "kits" that are pre-manufactured at the company's U.S. AMP-1 Manufacturing Facility in Casa Grande, Arizona, and, over time, for production of complete vehicles. At its peak, the company expects to manufacture up to 150,000 vehicles per year at the KAEC facility. Construction of the plant is expected to start in the first half of 2022. Vehicles in the initial phase will be slated for the market in Saudi Arabia, but Lucid plans to export finished vehicles to other global markets, including exclusive models designed to appeal to Lucid's discerning customers in the region and beyond. Lucid's AMP-1 in Arizona will continue to serve as the company's central manufacturing hub, with the Lucid Production System and other manufacturing technologies refined in the United States before deployment at other factory sites. Lucid has already commenced the second phase of construction at AMP-1 to add 2.85 million square feet of space, with plans to further expand to an annual production capacity of 365,000 vehicles in Arizona. The company expects that its production capacity in Arizona and Saudi Arabia will exceed 500,000 vehicles per year in aggregate when each facility reaches its target capacity.

Lucid anticipates that Saudi Arabia's efforts to foster an automotive ecosystem through its Saudi Vision 2030 should yield cost savings for Lucid as well as environmental benefits, with reduced transportation of product to the customer. The project should also enable opportunities for Saudi Arabia to diversify and transition from fossil fuels to sustainable energy and transportation. Lucid expects to employ several thousand people at its KAEC facility once full production capacity is established, the majority of which are expected to be Saudi Arabian citizens. Lucid has established an internship program with the PIF to provide educational opportunities and training for Saudi Arabian citizens at Lucid's facilities in California and Arizona to develop talent for operations in Saudi Arabia. The company, in addition, will build and run dedicated training centers in KAEC to support skills development for the workforce.

PIF has been partnering with leading innovators globally such as Lucid, which demonstrates PIF's commitment to shape the economies of the future and drive the economic transformation of Saudi Arabia in line with Saudi Vision 2030.

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