Lucid Motors is helping oil-rich Saudi Arabia go electric in its ambitious plan to become a carmaking powerhouse

• Tesla rival Lucid Motors is helping Saudi Arabia to go electric in its carmaking push, per the FT.
• The oil-rich kingdom plans to invest billions into becoming a hub for EV manufacturers such as Lucid.

Saudi Arabia is tapping Tesla rival Lucid Motors to help it become a hub for making electric cars, part of the energy-rich kingdom's ambitious plan to be less reliant on its oil income.

US-based Lucid has signed up to build 150,000 cars a year in Saudi Arabia by 2025, the Financial Times reported at the weekend. That makes up a big chunk of the production it wants the hub to reach within the next seven years.

The kingdom is pouring dollars into the effort, overseen by its $600 billion Public Investment Fund. The sovereign wealth fund has already spent about $2 billion picking up a majority stake in Lucid, per the FT.

Saudi Arabia's mission to become an EV manufacturing powerhouse is part of its ambitious plan to become less reliant on oil income, its main source of revenue.

It has reaped hefty profits from its oil sales over the past year on the back of Russia's war with Ukraine, which sent crude prices soaring in 2022. Its state-owned oil company Saudi Aramco posted a 39% jump in profit in November, thanks to that price surge.

Tapping into the EV industry is also a way to create new jobs and skills in the economy, as Saudi Arabia seeks to capitalise on the expected growth in the sector thanks in part to climate change initiatives.

Lucid's factories will be based in the King Abdullah Economic City, which will act as the heart of the supply chain — the main focus of the EV startup's efforts.

Lucid's stock has been crushing it lately, largely in part due to rumors of full takeover by Saudi Arabia's PIF, which already owns over 60% of the automaker. That helped it beat rival carmaker Tesla to become the best-performing stock on the Nasdaq Composite last week.