Skip to main content

PIF, the Saudi Arabian sovereign wealth fund that Tesla Inc CEO Elon Musk has said could help him fund an offer to take his electric car maker private, is in talks to invest in aspiring Tesla rival Lucid Motors Inc, people familiar with the matter said on Sunday.

The talks between privately-held Lucid Motors and PIF underscore the latter’s appetite to invest in electric car makers to diversify the oil-rich Middle Eastern kingdom’s investment portfolio.

A deal with Lucid Motors would also be more in line with PIF’s limited resources, given that, despite its $250-billion in assets, PIF has already made substantial commitments to other technology companies or investments, including a $45-billion agreement to invest in a giant technology fund led by Japan’s SoftBank Group Corp.

Story continues below advertisement

PIF and Lucid Motors have drawn up a term sheet under which PIF could invest more than $1-billion in Lucid Motors and obtain majority ownership, the sources said. PIF’s first investment in Lucid Motors, however, would be for $500-million, and subsequent cash injections would come in two stages that are contingent on Lucid Motors hitting certain production milestones, one of the sources added.

The talks between PIF and Lucid Motors may not result in a deal, the sources cautioned.

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

Based in Newark, California, Lucid Motors was founded in 2007 as Atieva by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former exec at Oracle Corp and Redback Networks. It received backing from Chinese investors, including Jia Yueting and BAIC. Other venture capital backers have included Venrock, Mitsui & Co, Tsing Capital, Pragma Ventures, and Oriza Ventures.

Musk shocked investors this month with a tweet that he was considering taking Tesla private at a price of $420 a share, or $72-billion, and that funding was “secured.”

He elaborated last Monday that he believed Saudi Arabia’s PIF, a new shareholder in Tesla, could provide the necessary funding, although sources close to the sovereign wealth fund have played down that prospect.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies