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Lucid Sheds More Light On Its Saudi Arabian Factory: AMP-2 Will Make 155,000 EVs/ Year

Lucid managed to get where it is thanks to the investments of Saudi Arabia’s PIF (Public Investment Fund). This former Tesla investor made a deal with Lucid in 2018 to invest in the company in exchange for a factory in the country. In February, the company confirmed the plant, and it now made a ceremonial signing event to make that official. We also got more information about AMP-2, or Advanced Manufacturing Plant #2.
Peter Rawlinson signs deal to build AMP-2 in KAEC, Saudi Arabia 11 photos
Render of Lucid's Saudi Arabia future plant2022 Lucid Air2022 Lucid AirLucid Project Gravity SUV ConceptLucid Project Gravity SUV ConceptLucid Project Gravity SUV ConceptRender of Lucid's Saudi Arabia future plantPeter Rawlinson signs deal to build AMP-2 in KAEC, Saudi ArabiaPeter Rawlinson signs deal to build AMP-2 in KAEC, Saudi ArabiaLucid's ceremonial signing event to make AMP-2 in Saudi Arabia official
Lucid’s third manufacturing facility – the first outside the U.S. – will be established in KAEC (King Abdullah Economic City), which is not Jeddah nor NEOM, a planned city being constructed 805 kilometers (500 miles) north of KAEC. These were pointed out as the most likely places for Lucid to have its plant. Now we know that Jeddah was closer to getting there: it is 130 km (81 mi) to the south of KAEC.

Construction should begin before the middle of 2022, but Lucid did not disclose when it expects the plant to start manufacturing its cars. That will probably not make that much of a difference now because the factory will start with CKD (completely knocked down) kits. That means the car parts will be produced in Casa Grande, Arizona, and will be shipped to Saudi Arabia just to get assembled.

According to Lucid, the factory’s production will be focused on the Saudi Arabian market, which bought 556,559 cars in 2021. That’s a bit more than what the American EV maker will manage to produce with AMP-1 (365,000 vehicles) and AMP-2 (155,000 EVs) when they are at total capacity.

In other words, the Saudi Arabian market does not justify having a factory there. At this point, it is more something Saudi rulers want to help shape the country’s economy in the next few years than something Lucid would target for its strategy. For the factory to make sense, it has to be target exports. For exports to make sense, it has to produce the vehicles locally at competitive costs. Nobody knows if Saudi Arabia can deliver that because nobody has ever tried.

Making vehicles in the country also brings considerable risks. A few months after Lucid committed to building a factory there – more precisely, on October 2, 2018 – the journalist Jamal Ahmad Khashoggi was tortured and killed at the Saudi Arabian Consulate in Istambul, Turkey. Crown Prince Mohammed bin Salman is accused of having ordered his murder.

Big companies usually establish their branches in places where legal security is a given. The exodus of multinational enterprises from Russia due to the invasion of Ukraine proves how much is at stake: you may put a lot of money into equipment and other stuff that you cannot pack and ship should anything go wrong.

Considering Lucid will get $3.4 billion in incentives over 15 years and that the factory only exists because of PIF investments, it must have thought it was worth promising Saudi Arabia a factory the country would pay for – even if it now belongs to Lucid. Only the EV maker’s reputation could get tainted – and it is still trying to build it.

press release

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