Aston Martin has struck a deal with a US company to develop electric cars in a move hailed as a ‘game-changer’ by its billionaire boss.
The agreement deepens ties between the Warwickshire firm and Saudi Arabia, with the Middle Eastern kingdom’s sovereign wealth fund owning large stakes in both parties, while also shunning an existing partnership with German giant Mercedes-Benz.
Aston Martin will pay £182million in cash and shares to Lucid Motors, an electric vehicle (EV) firm in California in which the Saudi Public Investment Fund (PIF) has a 55 per cent stake.
The deal will give the company access to Lucid’s battery systems and other components which power the car, including engines, axles and transmission.
Aston plans to spend at least £177million on parts as it looks to launch its first electric vehicle in 2025.
Power play: Aston Martin has struck a deal with a US firm Lucid Motors to help it develop electric cars in a move hailed as a ‘game changer’
The deal gives Lucid a 3.7 per cent stake in Aston, making it the sixth-largest shareholder behind other backers, including executive chairman Lawrence Stroll (pictured) and the PIF who own 21 per cent and 17.9 per cent respectively.
Aston shares surged 10.8 per cent, or 35.2p, to 362.4p, while Lucid climbed 5.6 per cent on Wall Street.
‘The proposed supply agreement with Lucid is a game-changer for the future EV-led growth of Aston Martin,’ Stroll said, saying it would get access to ‘the industry’s highest performance and most innovative technologies’.
Aston has ditched an agreement to buy batteries from Mercedes-Benz, allowing it to avoid financial commitments made to the German car maker.
It will still use some electric systems and engines from Mercedes that date back to the deal in 2020. Mercedes is also a major Aston shareholder, with a 9.4 per cent stake.
The deal is a major boost for Lucid, which has struggled with mounting losses and shrinking cash reserves.
It follows news last month that Geely, one of China’s biggest manufacturers, doubled its stake in Aston to 17 per cent.
Geely, which owns brands including Sweden’s Volvo and Norfolk-based Lotus, has tried to buy Aston several times. In 2020, it was beaten by a consortium led by Stroll.
Lucid’s parts will provide a welcome boost for the UK’s EV industry, which is struggling with a shortage of batteries as well as growing concerns about the rollout of charging points ahead of a planned ban on sales of new petrol and diesel cars from 2030.
Nat Rothschild, the billionaire chairman of Volex, which makes power cords and charging plugs for EVs, has said that ministers need to provide a ‘strong blueprint’ on rolling out charging infrastructure.
