DUBAI: Saudi Arabia’s Public Investment Fund (PIF) has already made billions of dollars in profit on its investment in Lucid Motors, the California upmarket electric vehicle (EV) manufacturer, and could earn many billions more over the next five years.

PIF announced its first investment of SR3.75 billion ($1 billion) in Lucid in September 2018.

The sovereign wealth fund congratulated Lucid on its market debut and said on Twitter: “Our investment in Lucid Motors and the production of Lucid Air is a key step in the strategy for long term growth opportunities, supporting innovation and technology development, and doing revenue and sectoral diversification in Saudi Arabia.” Shares in Lucid raced to an 11 percent premium on the opening day of trading on New York’s Nasdaq Global Select Market on Monday, valuing it at more than $24 billion.  

PIF is believed to hold more than 60 percent of the stock after its 2018 cash injection into the start-up, giving it a paper profit of at least $15 billion.

This could go significantly higher if Lucid follows the model of rival EV maker Tesla. Elon Musk’s high-flying company reported better than forecast profits earlier this week, and saw its share price leap 2 percent, giving it a market value of $633 billion.

Lucid is at a much earlier stage of the EV road, but projections made by its management foresee a big rise in sales and profits ahead.

The company sees revenues of $2.2 billion next year after it has begun selling cars in substantial numbers, rising to $22.8 billion in 2026. By then, it will be selling 250,000 cars a year, making a profit of nearly $3 billion and generating free cash of $1.5 billion, according to the forecasts.

Peter Rawlinson, CEO and CTO of Lucid Group, who was a former chief engineer at Tesla, said that the company was “on track” to meet its projections after the Nasdaq debut.

“Lucid Air (the launch model) represents the next generation of electric vehicles and creates new standards for interior comfort, range, efficiency, and power,” Rawlinson said. 

“We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created.”

Lucid is likely to face more intense competition in the EV space than Tesla did when it launched its first model more than a decade ago, with other “legacy” manufacturers across the world launching electric products.

But Rawlinson is confident that superior design will give it an edge in the premium market segment. 

“We have got the best car in the world,” he told Arab News earlier this year.

Success for Lucid will be a big boost for PIF’s investment strategy, but it could also have significant industrial and commercial implications for the Kingdom. Lucid is likely to open a showroom in Saudi Arabia and there has been intensifying speculation that it will eventually build a production plant in the Kingdom, too.

Rawlinson said of PIF: “They put their faith in us, that is why we are here today thriving.”