After an especially tumultuous couple of weeks for Tesla, Elon Musk’s potential buyout partner is apparently looking to obtain a majority stake in another electric car company.
The Public Investment Fund of Saudi Arabia is considering an investment in Lucid Motors, a Newark, CA-based electric car maker, that could total more than $1 billion and give the fund ownership of the company, according to Reuters.
Under the terms of the agreement, the Saudi Arabian sovereign wealth fund, which manages some $250 billion, would reportedly provide an initial investment of $500 million, then make two subsequent investments if Lucid hits certain production targets.
Founded in 2007 by former Oracle executive Sam Weng and former Tesla vice president Bernard Tse, Lucid is backed by VCs including Venrock and Tsing Capital. Unlike Tesla, the company has yet to release any cars on the open markets. But last year, Lucid unveiled a prototype sedan, Lucid Air, which has 400 horsepower and a starting price of $60,000. The car is expected to ship sometime in 2019.
The potential Saudi Arabia PIF-Lucid partnership could be problematic for Musk, who already appears stressed. Last week, the billionaire entrepreneur gave an interview with The New York Times in which he alternated between laughing and crying while detailing the pressures of running Tesla.
The latest controversy came when Musk himself tweeted earlier this month that he planned to take the business private for $420 per share, or about $72 billion, noting that funding was secured.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk later clarified in a blog post that the Saudi Arabia wealth fund, which owns a 5% stake in Tesla, was the potential backer, though no formal agreement had been made. The company is now reportedly facing a subpoena from the SEC and lawsuits from investors that allege Musk’s tweet aimed to inflate the company’s stock price. Tesla stock initially dipped Monday before closing the afternoon up just about 1% at $308.44 per share.