Saudi Arabia’s sovereign wealth fund invested $1 billion Monday in an American electric car manufacturer just weeks after Tesla CEO Elon Musk earlier claimed the kingdom would help his own firm go private.
Tesla stock dropped Monday on reaction to the news, the same day that the Saudi fund announced it had taken its first loan, an $11 billion borrowing from global banks as it tries to expand its investments.
The Saudi Public Investment Fund said it would invest the $1 billion in Newark, California-based Lucid Motors.
The investment “will provide the necessary funding to commercially launch Lucid’s first electric vehicle, the Lucid Air, in 2020,” the sovereign wealth fund said in a statement. “The company plans to use the funding to complete engineering development and testing of the Lucid Air, construct its factory in Arizona, enter production for the Lucid Air to begin the global rollout of the company’s retail strategy starting in North America.”
Lucid issued a statement quoting Peter Rawlinson, its chief technology officer, welcoming the investment.
“At Lucid, we will demonstrate the full potential of the electric-connected vehicle in order to push the industry forward,” he said.
The decision comes after Musk on Aug. 7 tweeted that he had “funding secured” to take Tesla private. Investors pushed Tesla’s shares up 11 percent in a day, boosting its valuation by $6 billion.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
There are multiple reports that the U.S. Securities and Exchange Commission is investigating the disclosure, including asking board members what they knew about Musk’s plans. Experts say regulators likely are investigating if Musk was truthful in the tweet about having the financing set for the deal. Musk later said the Saudi Public Investment Fund would be investing in the firm, something Saudi officials never comment on.
Meanwhile Monday, the sovereign wealth fund known by the acronym PIF said it had taken its first loan, an $11 billion borrowing. It did not say how it would use the money, only describing it as going toward “general corporate purposes.”
The Las Vegas-based Sovereign Wealth Fund Institute estimates the Saudi fund, known by the acronym PIF, has holdings of $250 billion. Those include a $3.5 billion stake in the ride-sharing app Uber.
Saudi Arabia’s 33-year-old Crown Prince Mohammed bin Salman has talked about using the PIF to help diversify the economy of the kingdom, which relies almost entirely on money made from its oil sales.
Diver Who Helped With Thai Cave Rescue Sues Elon Musk
A British diver who helped rescue youth soccer players trapped in a Thai cave is suing Tesla CEO Elon Musk.
Vernon Unsworth alleges that Musk falsely accused him on Twitter of being a pedophile.
The lawsuit filed in Los Angeles federal court seeks more than $75,000 in damages and a court order stopping Musk from making further allegations.
Musk called Unsworth a “pedo” after Unsworth criticized Musk in a television interview. Musk and SpaceX engineers built a small submarine and shipped it to Thailand to help with the rescue. The device wasn’t used, and Unsworth called it a “PR stunt.” Later Musk accused Unsworth of moving to Thailand to be with a bride who was about 12 years old.
Tesla did not immediately respond to a request for comment.
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