This afternoon, the shares of Tesla dropped after the sovereign fund of Saudi Arabia invested $1 billion into Lucid Motors, the rival of the company.
Today, the shares of the company declined by two percent after it was announced that the Public Investment Fund of Saudi Arabia (PIF) would helping to launch the first electric vehicle of the Silicon Valley company. The vehicle will be called the Lucid Air and it will be released in 2020.
In the afternoon, Tesla shares were able to recover to $300.
The payment will be made through a special purpose vehicle that is wholly owned by the PIF. It will be utilised to complete the development and testing of the product. It will also be used in the construction of an Arizona factory and start the production of the car.
The said announcement comes weeks after Elon Musk, the billionaire chief executive of Tesla, claimed that the PIF could help him fund a $72 billion deal to take the car manufacturer private.
A PIF spokesperson stated: “By investing in the rapidly expanding electric vehicle market, PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development, and driving revenue and sectoral diversification for the Kingdom of Saudi Arabia.”
He added: “PIF’s international investment strategy aims to strengthen PIF’s performance as an active contributor in the international economy, an investor in the industries of the future and the partner of choice for international investment opportunities.”
He concluded: “Our investment in Lucid is a strong example of these objectives.”
Peter Rawlinson, the chief technology officer of Lucid, stated: “The convergence of new technologies is reshaping the automobile, but the benefits have yet to be truly realised.
He added: “This is inhibiting the pace at which sustainable mobility and energy are adopted. At Lucid, we will demonstrate the full potential of the electric connected vehicle in order to push the industry forward.”