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Home / Business / Exclusive: Saudi PIF in talks to invest in aspiring Tesla rival Lucid Sources

Exclusive: Saudi PIF in talks to invest in aspiring Tesla rival Lucid Sources



(Reuters) – PIF, the Saudi Arabian sovereign wealth fund, said Tesla Inc ( TSLA.O ) CEO Elon Musk, could help him fund a $ 72 billion deal www.moviesfilmonline.com / de / movies / … of – the – opera In negotiations with talented Tesla rival Lucid Motors Inc, well – known figures said Sunday. Englisch: www.moviesfilmonline.com / en / movies / oliver – twist.

Calid Motors, based in California, presented a prototype luxury sedan, Lucid Air, at its launch in Fremont, California, USA on December 14, 2016. REUTERS / Alexandria Sage

Conversations between privately held Lucid Motors and PIF underscores the company's desire to invest in electric cars to diversify the rich real estate investment portfolio in the Middle East.

An agreement with Lucid Motors would also correspond to PIF's limited resources, as PIF, despite its $ 250 billion in assets, has already made significant commitments to other technology companies or investments, including a $ 45 billion investment agreement giant technology fund led by the Japanese SoftBank Group Corp. ( 9984.T ).

PIF and Lucid Motors have created a term sheet in which PIF has been able to invest more than $ 1 billion in Lucid Motors and obtain majority stakes. However, PIF's first investment in Lucid Motors would be $ 500 million, and the subsequent cash injections would be in two phases, depending on Lucid Motors achieving certain production milestones, sources said.

The talks between PIF and Lucid Motors must not lead to a deal, the sources warned.

The sources have asked not to be identified because the matter is confidential. PIF and Lucid Motors did not immediately respond to requests for comment.

Musk, a 47-year-old investor and engineer, baffled financial markets earlier this month when he revealed on Twitter that he was considering a $ 420 private deal for Tesla, a pioneer of automobile manufacturing who was the first in the world to ever develop Premium All-Electric sedan.

He added that the funding was "secured" and worked out last Monday that he believed that Saudi Arabia's PIF could provide the necessary funding, although sources close to the sovereign wealth fund downplayed this prospect. Earlier this year, PIF built a stake of just under 5 percent in Tesla by snatching shares in the open market rather than buying newly issued shares.

Musk has also stated that he believes that two-thirds of existing Tesla shareholders are selling their holdings to a private company rather than paying off, and that he is still talking to major shareholders and advisers before settling on a structure for one Deal starts.

Access to cheap capital is a constant challenge for automakers who can spend a billion dollars or more on a single new model and mass-produce it just to flop the vehicle due to a cyclical slump or a shift to market taste.

Based on the edges of Silicon Valley, Newark, California, Lucid Motors was founded in 2007 as Atieva by former Tesla vice president and board member, Bernard Tse, and Sam Weng, former manager of Oracle Corp. and Redback Networks , It was backed by Chinese investors, including technology entrepreneur Jia Yueting and state car maker BAIC. Other venture capitalists were Venrock, Mitsui & Co and Tsing Capital.

Lucid Motors does not sell cars yet. In 2016, it unveiled a prototype of its Lucid Air model, a $ 100,000 luxury sedan that it wanted to build in Arizona in late 2018. It's not clear when this car will be available, though the company accepts repayable deposits totaling $ 2,500 consumers on its website.

Tesla is much more advanced as an electric car manufacturer, though investors are wondering how long it can take before they make a profit. It burned through cash as it aggressively ramped up the production of Model 3, a process that Musk called "production hell".

UBS analysts last week questioned the profitability of Model 3 in a report that Tesla could lose $ 6,000 on each base model.

Reporting by Dasha Afanasieva in London and Harry Brumpton in New York; Additional reporting by Paul Lienert in Detroit and Saeed Azhar in Dubai; Editing by Nick Zieminski

Our standards: The Thomson Reuters Trust Principles.

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