Aston Martin Lagonda Global Holdings Plc is sealing a deal with Lucid Group Inc. on electric vehicle technology.
We all look forward to a great partnership between the influential British carmaker and the automobile company that is relatively a newcomer in the industry.
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The partnership will be supported by Saudi Arabia’s sovereign wealth fund.
According to the deal, Aston Martin will pay $232 million in cash and shares to Lucid, and in exchange, the latter provide them with battery-electric powertrain components.
The UK-based carmaker also extended cooperation with Mercedes-Benz Group AG, though it will discontinue issuing stock to the German carmaker. Already, Mercedes-Benz owns an estimated 9% stake in Aston Martin.
Following the announcements, shares in Aston soared up, reaching 15% which happens to be its biggest intra-day move in over a month. Lucid, on the other hand, reached as high as 9.1% in premarket U.S. trading.
“The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin,” said Chairman Lawrence Stroll in a statement.
Stroll, 63, has already spent three years attempting to turn around the 110-year-old British car manufacturer with a long-standing history of financial crisis.
The company has needed a number of capital raises since he liberated it in early 2020. In his most recent move, he had made Saudi Arabia’s Public Investment Fund and China’s Zhejiang Geely Holding Group Co. major shareholders.
According to compiled data, the Public Investment Fund (PIF) owns about 18% of Aston Martin and 49% of Lucid.
Aston Martin’s announced BEV-technology partnership with Lucid for a 3.7% stake provides comfort that the luxury brand can successfully transition to being fully electric by 2030 as targeted, and reduces reliance on Mercedes for technology.
— Michael Dean, European automotive analyst
Aston Martin’s long-standing financial predicaments have made it increasingly dependent on partners for technology that other carmakers consider key to their products.
Models such as the DB12 sports car and DBX sport utility vehicle run on Mercedes engines.
While the German car manufacturer will continue to provide it with powertrains and electric architectures for both current and future Aston Martin vehicles, it will now receive cash payments from Aston Martin rather than shares as previously planned.
A spokesman from Aston Martin said Lucid’s technology is currently, whereas Mercedes’s AMG electric platform will remain inaccessible until late 2025.
Lucid has been producing a lone electric vehicle, the Air sedan, since September 2021. The deal with Lucid will help Aston Martin achieve its electrification targets.
The British car manufacturer has plans to launch its debut plug-in hybrid supercar, the Valhalla.
The proposed launch is scheduled to take place early next year, followed by its first battery-powered electric vehicle in 2025.
Furthermore, all new product lines will own an electrified powertrain option by the following year.
The car manufacturer said it will make a total of $132 million cash payments in phases to Lucid. It has also committed to a budget of at least $225 million on Lucid’s powertrain components.
Furthermore, the British car manufacturer will pay Lucid another $10 million for integrating its technology into their vehicles.
Aston Martin is tying up with Lucid on electric vehicle technology, uniting the storied British carmaker and relative newcomer both backed by Saudi Arabia’s sovereign wealth fund https://t.co/3AOhD43OQL
— Bloomberg Technology (@technology) June 26, 2023
