Lucid has already launched its factory in Saudi Arabia and started the production of electric cars there, with the support of the government

Lucid has already launched its factory in Saudi Arabia and started the production of electric cars there, with the support of the government

October 3, 2023, 11:41 am editors

Last week announce that Lucid Motors obtained a license to manufacture cars in Saudi Arabia and plans for a factory in this country were confirmed again, Lucid thus becoming the first manufacturer in this eastern state. I also mentioned the great equipment that Lucid guaranteed for 20 years before building the factory. But the American manufacturer surprised everyone shortly after, presenting its ready-made factory, even more, announcing that it is already starting production of the Lucid Air model.

Photo: Lucid’s new factory in Saudi Arabia

So, unlike the approach of many other electric car manufacturers, who announce a new model or factory, then continue to delay or keep the public in suspense for years until everything is translated into reality, Lucid Motors already had a factory in Saudi Arabia. – built and fully equipped, with parts and components supplied, so you can get it up and running in no time after obtaining a license.

Lucid’s new factory is the second in the world owned by a manufacturer, after the one in the United States, and is located in KAEC, an economic city specifically designed to be a technological hub, dedicated to creative industries. The factory is fully equipped to carry out the full production cycle, but since it is built in an area that was a desert until recently and is still at the beginning of economic activity, there are no sellers and other companies nearby, therefore supplying equipment. only for Lucid at this stage is more complicated than the equipment. That is why, as previously announced, at the initial stage the factory assembles vehicles from large facilities, pre-assembled in the USA and all are sent here for final assembly in the CKD state.

The production volume for the first year is estimated to be only 5,000 electric cars, most of which will go to the domestic market of Saudi Arabia, but later the production will increase to 155,000 cars every year, that is the production capacity of the new Lucid factory. Usually, at that stage the factory will also export cars to other countries.

But in reality, Lucid Motors’ new plant in Saudi Arabia may not need to export much, because Saudi Arabia has also given Lucid big strategic “gifts”.

On the one hand, the Saudi government entered into a contract with Lucid for the mandatory purchase of 50,000 Lucid electric vehicles for the government fleet over the next 10 years, with an option included in the contract from the beginning to purchase another 50,000 vehicles, bringing the total to 100,000 vehicles. of electricity for the needs of the Saudi government, central and regional offices. Thus, Lucid can bet from the start on guaranteed high sales figures from its new factory.

The second major incentive for the government is the fact that Saudi Arabia adopted, on the occasion of its new electric car factory, a plan to green the public transport in the country, which insists that by 2030, at least 30% of new cars will be sold in Saudi . Arabia must be electric. So, of course, the demand for electric cars will be high, and Lucid, in a context where it benefits from 0% VAT, 0% part tax for its factory and a profit tax of only 5%, will be very competitive. advantage over any other comparable manufacturer, being able to account for a large 30% share of the legally guaranteed market for electric vehicles.

Why is Saudi Arabia doing all this, being an oil-rich country, where fuel is very cheap domestically, and where people love big SUVs with big engines? First, because he knows that oil will also run out one day, and his needs, and he wants to have these big economic cities, which attract minds in technology, so that his economy is not just an oil well. the world. Second, because even the big oil-rich countries understand that they should not oppose electric cars, but lead this trend of development and ensure that they will benefit from it. And the sovereign fund of Saudi Arabia, which is responsible for making strategic investments from the money obtained from the sale of oil, has already bought 61% of the shares of Lucid Motors. So 61% of the profits that Lucid Motors will earn in the future worldwide will also go to the benefit of the Saudi government.