British sports car group Aston Martin has inked a supply deal with electric car startup Lucid Group (controlled by Saudi sovereign wealth fund Pif, which has an 18% stake in Aston Martin) to create ultra-luxury high-performance electric vehicles. He also announced a change in cooperation with Mercedes-Benz. In particular, Lucid will supply Aston Martin with selected propulsion components for initial and future models of battery electric vehicles. Under the terms of the agreement, Aston Martin would issue 28,352,273 new common shares and make phased cash payments to Lucid, with the combined value of the shares issued and the cash payments totaling approximately US$232 million ($182 million pounds). Lucid will become a shareholder of Aston Martin with 3.7 per cent.
Lucid, 11 billion market capitalization on the Nasdaq down 11% this year, won the 2023 World Luxury Car Award with its Lucid Air. In the first quarter it recorded a turnover of 149.4 million dollars, with 2,314 vehicles produced at its Arizona plant (1,406 delivered). The US manufacturer expects to produce more than 10 thousand vehicles in 2023 and closed the first three months of the year with total liquidity of about 4.1 billion dollars, useful for financing the company at least until the second quarter of 2024.
Aston Martin, with a market cap of 3 billion dollars, met its targets in the first quarter and also maintained its estimates for its year-end targets. Sales at 1,269 units against 1,168 in 22. Revenues and Ebitda up, debt down. Shares are up 10% to more than double in value since the beginning of the year. Lucid was also in flight (+11%).
“The proposed supply deal with Lucid is a game changer for Aston Martin’s future EV-led growth,” chairman Lawrence Stroll said in a statement. “Based on our strategy and requirements, we selected Lucid, gaining access to the industry’s most innovative and highest performing technologies for our future BEV (battery powered car, ed) products.” Stroll, 63, has been engaged for three years in an attempt to alleviate the debt burden of the glorious British car manufacturer. Aston Martin has needed several capital increases in recent years and has sought footholds both in agreements with the Chinese group Geely and with Pif, the sovereign wealth fund of Saudi Arabia.
The Public Investment Fund owns the majority of Lucid (about 11 billion dollars in capitalization, it will build its first production plant abroad in the Kingdom) and 17% of Aston Martin, where it is the second shareholder with 17% together with Geely (followed by Mercedes-Benz with 9.7%). It is no secret that the Saudis are harboring projects of greatness in the electric car sector also in support of their future smart cities. Saudi investment in the production of electric vehicles is expected to reach $50 billion over the next decade. At least 30% of vehicles on the road in Riyadh are expected to be electric by 2030.