Lucid just sold a lot of cars to Saudi Arabia

You may have heard: Elon Musk bought Twitter this week. The surprising move raises all sorts of unanswerable questions, but also, in a roundabout way, casts a shadow on the other Musk company that starts with the letter T. With its micromanaging CEO distracted by his new company, what will happen to Tesla?

For now, this is yet another unanswerable question, but we do know that a growing number of Tesla competitors are entering the electric vehicle market. This week, Ford started production of its highly anticipated electric F-150, and GM said it will start making an electric Corvette. Rivian, the Amazon-backed electric truck maker, revealed some new features for its vehicles (one is called “Sand Mode”). Then there’s Lucid, the EV company whose Air sedan has been called “a direct challenge to Tesla’s dominance” and “Tesla’s closest imitator.” This week, the company announced that the Saudi Arabian government would buy up to 100,000 of its flagship model over the next 10 years.

Don’t read too much into the timing here. All of these announcements coincided with the end of the New York Auto Show, and Musk had been quietly buying up Twitter stock for months before his stake became public and ultimately pushed him to make a bid for the company. Either way, Tesla’s stock tanked this week, wiping out more than $126 billion of its valuation by the end of the day Tuesday. Part of that has to do with the fact that Musk tied the financing of the Twitter deal to his Tesla shares, but an arguably bigger part has to do with investors’ anxiety about Musk shifting his attention away from Tesla and toward his new social media platform.

Unless you’re a Tesla investor — or a Twitter investor, for that matter — a lot of this might sound irrelevant. But if you’re someone interested in the future of transportation, these developments could add up to a pivotal moment, one in which Elon Musk’s distractions could have negative effects on Tesla’s business and offer these new EV companies some sort of opening to break into the EV market. If you’re Lucid, the “direct challenge to Tesla’s dominance,” this probably feels like a huge opportunity.

Lucid, like Rivian, is a California-based startup that wants to reinvent the automobile from the wheels up. The company, which is headquartered in a former Theranos building near Fremont, started delivering the first Air sedans late last year, and so far, it has knocked the socks off of the automotive press. MotorTrend named it Car of the Year, and it’s not hard to see why. The Air Dream Edition Performance boasts 1,111 horsepower, can hit 60 miles per hour in just 2.42 seconds, and gets up to 520 miles of range. (The Tesla Model S Long Range tops out at about 400 miles of range.) It also costs about $170,000, but Lucid is now accepting reservations for a base model called the Air Pure for $77,400 before subsidies. (The Tesla Model S starts at $99,990, though the base price Model 3 is a comparatively affordable $46,990 — subsidies bring those prices down by a few thousand dollars.)

The Model S comparison is unavoidable. Lucid’s chief executive and chief technology officer is none other than Peter Rawlinson, the man who engineered the original Tesla Model S. Rawlinson left Elon Musk’s company in 2012 to care for his mother in Wales, though he told the New York Times that he also had “a boss who wasn’t treating me very well.” The next year, Rawlinson joined Lucid, which was then a battery maker known as Atieva. The company came close to going under a number of times before Saudi Arabia’s Public Investment Fund saved it with $1 billion in funding back in 2018. Funnily enough, this was the same year Elon Musk told the head of the fund he was “deeply offended” that the Saudi government had refused to help him take Tesla private at $420 a share.

Lucid’s ties to Saudi Arabia are paying dividends now that the country wants to buy thousands upon thousands of Air sedans. But it’s also a complicated relationship. That $1 billion investment happened not long before the murder and dismemberment of Jamal Khashoggi, a Saudi journalist who had been critical of Crown Prince Mohammed Bin Salman, and the relationship between Saudi Arabia and the United States has been strained ever since. The crown prince also happens to oversee the Saudi Public Investment Fund, which aims to reduce the country’s reliance on fossil fuels. As part of its new deal with the Saudi Arabian government, Lucid says it will also construct a new factory to build its electric vehicles in the kingdom. That may be easier said than done since a lack of manufacturing infrastructure in Saudi Arabia means that Lucid would have to import the majority of its car parts, according to the Wall Street Journal. In any case, assuming the Saudi government does commit to buying 100,000 Air sedans, Lucid will see its number of customer reservations jump from 25,000 to 125,000.

However, those are tiny numbers compared to Tesla’s, which shipped almost a million electric vehicles last year alone. It may be true that companies like Lucid and Rivian are generating a lot of buzz and improving upon the specifications of the Model S and others, but Tesla is still a juggernaut in this space. Time will tell whether it’s the startups or the internal combustion giants — namely, GM and Ford, which have both committed to going all-electric by 2035 — that ultimately beat out Tesla for the No. 1 spot in the EV industry. But if there ever was a time to get a head start, it’s now. Tesla’s boss is away. Time to play.

—Adam Clark Estes, deputy editor