Why Lucid's Partnership With Aston Martin Is a Deal Made in Heaven

There are two aspects of the deal that could surprise people. "Why Lucid" is the first one, but the answer lies in Aston Martin's ties with Saudi Arabia. The British company's F1 team is called Aston Martin Aramco Cognizant. As you may be aware, Aramco is Saudi Arabia's state-owned petrol and natural gas company. Lucid's main shareholder is the Public Investment Fund (PIF), the country's sovereign wealth fund. It is not difficult to see how these dots have connected – and who connected them.

The second potentially shocking bit is that Aston Martin's partnership with Mercedes-Benz also includes electric car components. Theoretically, its "Racing. Green." strategy of going fully electric by 2030 was already covered. The British automaker's CEO quickly tried to fix that by stating that his company now had "two world-class suppliers to support the internal development and investments" Aston Martin's electrification strategy will demand.

We may discuss if Lawrence Stroll's efforts to please Aston Martin's German partner were competent or not. However, the subliminal message is clear: the agreement with Lucid implies Aston Martin prefers to use Lucid components and motors than what Mercedes-Benz has to offer. Even with official denials, Lucid benefits from the situation.

The American startup wants to establish itself as a luxury company, not just another BEV maker. All its communication efforts have been focused on dismissing any comparison with Tesla while also humiliating the world's most valuable car company by beating it with impressive technical specifications. Lucid repeats over and over that its main competitor is the EQS, not the Tesla Model S. The association with Aston Martin may help it learn a thing or two about the ultra-luxury segment. Still, the hidden gem for the American BEV maker is in the reputation field.

Aston Martin's CEO also mentioned a partnership with Geely, which seems to be more related to the Chinese company's expertise in its home market than to the technology it may share with the British carmaker. Aston Martin wants to develop its own electric car platform, something that Lucid can help a lot with due to its knowledge in that area.

Although Saudi Arabia certainly helped get the deal done, the American automaker also has impressive engineering, such as the "ultra-high performance twin motor drive unit" it developed for the Air Sapphire. Lucid never disclosed how powerful it is, but the electric sedan offers "over 1,200 hp."

Lucid also states Aston Martin can count on the Wunderbox – the startup's onboard charging unit – and "renowned battery technology." A motorsports electric motor revealed in January delivers 469 hp with a weight of 70.5 pounds (32 kilograms), but it will never make it into a production car. It is just an amazing engineering sample, able to reach 19,500 rpm. Anyway, expect all BEVs from the British car company to work at 924V, just like the Air. That helps them charge at very high speeds.

Another vital collaboration point for the companies is in exploring new market segments. As John Volker reminded his followers on LinkedIn, Aston Martin has tried to sell luxury sedans such as the Lagonda and Rapide for a long time, but that never went very well. Lucid may help the British automaker develop a nice electric grand touring.

In return, Aston Martin could help the American startup create an amazing electric sports car and fix its quality control as a collateral benefit. As much as Lucid has tried to dismiss comparisons with Tesla, the former is showing a disregard for that manufacturing task comparable to what the latter performs. That's not a dispute anyone would like to win.

Besides receiving money for selling its components to Aston Martin, Lucid will also be paid in shares. Reuters revealed that its stake in the British company would be 3.7%. That reinforces Lucid's commitment to the deal. Aston Martin's success in the electric car market will mean Lucid will sell more components and see its stake in the British company appreciate. On the other hand, Aston Martin will also do whatever it can to help Lucid succeed. Can you imagine how bad the British automaker would look if it were making its electric cars with parts supplied by a bankrupt company?

As I have written before, Lucid has a very low risk of financial problems with the Saudi Arabian financial backup. Its alliance with Aston Martin is another example of the support provided by the rulers of that country. Now it has to prove it is a worthy partner to the centenarian British brand. If it does, this partnership will be a water-shedding moment for the American BEV maker, giving it way more than shares and money.