A struggling startup experiences a certain kind of silence just before a wealthy individual enters. Investors cease answering phones. Press releases become more ambiguous. Engineers start making changes to their LinkedIn profiles. Then, just in time, a wire transfer arrives from Riyadh.
This has occurred more than once. It continues to occur. For the better part of ten years, Saudi Arabia’s Public Investment Fund, the kingdom’s sovereign wealth vehicle, has been saving electric vehicle companies that the rest of the market had discreetly written off. The most obvious example is Lucid Motors, but there are other examples as well. The story is essentially the same for Ceer Motors, the Foxconn joint venture, and the more recent Hyundai partnership being developed outside of Jeddah. One investor makes a decision, while three others struggle.
At this point, Lucid’s case is practically a parable. In 2018, the company was running out of runway, courting Ford, embroiled in a stake dispute with the founder of Faraday Future, and unable to persuade Silicon Valley that it was worth the trouble to take on another Tesla competitor. Then the PIF arrived with $1.3 billion and a commitment to continue writing checks. Saudi Arabia still owns more than 60% of the company after six years and about $10 billion. The fund gave Lucid an additional $1.5 billion last summer, which CEO Peter Rawlinson referred to as “a resounding endorsement.” In this industry, endorsements often sound a lot like life support.
Isn’t it odd that the money keeps coming in? It’s the pattern. Healthy businesses are not saved by the PIF. When Wall Street has run out of patience, when valuations have plummeted, and when the founders are running low, it moves in. In an interview with the Financial Times last year, Rawlinson acknowledged that he was unable to accept PIF wealth as limitless. It’s odd that a CEO would say that aloud. It’s probably true as well.
The first domestic EV brand in Saudi Arabia is Ceer, a joint venture with Foxconn that was revealed in late 2022. According to Reuters, it is unlikely to have a car on the road before this year, and by most accounts, it hasn’t shipped a single one yet. Today, Lucids assembled from Arizona kits are the most common sight in the kingdom’s auto market, parked in showrooms that seem more empty than they should. As of late 2024, only about 800 cars had been put back together at the nearby Lucid plant, despite the country’s declared goal of producing 500,000 EVs a year by 2030. It’s uncomfortable math.
After its factory opens, the Hyundai joint venture, of which PIF owns 70%, is expected to start producing 50,000 vehicles annually. That is far less than what Lucid’s facility was designed to produce, and Lucid is far from reaching its own capacity. The contradiction is difficult to ignore. The kingdom continues to construct factories for automobiles that consumers have not yet come to desire.
As this develops, it seems as though the PIF isn’t actually making investments in automobiles. Crown Prince Mohammed bin Salman has been telling a story about a post-oil future since 2016, and this investment is in optionality and narrative. It almost doesn’t matter if the cars sell. The important thing is that Vision 2030 doesn’t appear to be a bluff. Years ago, Tesla overcame similar doubts. It’s still really unclear whether Lucid, Ceer, and the Hyundai project will.
The role itself is evident. Only one investor was willing to be the last person in the room when three EV companies hit the wall at about the same time. That investor was not in Silicon Valley, Detroit, or Stuttgart. Writing checks that the rest of the market had already refused to write, it was in Riyadh.
