|By Arabian Post Staff| In an unusual move, Saudi Arabia’s sovereign wealth fund,which is a stake holder in Elon Musk’s Tesla, has invested $1 billion in rival Silicon Valley start-up Lucid Motors. This means the Saudis will benefit, irrespective of which new generation car company achieves leadership in this automobile sector.
Lucid is set to start making its first model, the Air sedan, in 2020. The comapny is building a plant in Arizona and starting production of the car that it has said will start at $60,000.
Saudi Arabia, the world’s biggest oil exporter, has been diversifying its economy after the collapse in crude prices. As part of the plan, the kingdom plans to turn the Public Investment Fund into the world’s biggest sovereign fund, controlling more than $2 trillion by 2030, and to hedge against fluctuations in oil prices.
“By investing in the rapidly expanding electric vehicle market, [the Public Investment Fund] 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,” the fund said in a statement.
According to Bloomberg, Musk stirred unease among Saudi officials about the publicity surrounding their potential role. The Saudis were apparently unhappy about Musk detailing his talks with the fund in a blog post. On top of that there were concerns about potential fallout from his tweets drawing shareholder lawsuits and an investigation by the Securities and Exchange Commission.
Last year, the Saudi fund announced plans to invest as much as $45 billion in a technology fund run by Japan’s SoftBank Group Corp., put $20 billion into a U.S. infrastructure fund managed by Blackstone Group LP and build a $500-billion city called Neom on the Red Sea. It raised a loan of $11 billion this week.
Also published on Medium.
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