At a gleaming white hangar on Saudi Arabia’s western coast last year, the kingdom’s business and political elite gathered to applaud one of Crown Prince Mohammed bin Salman’s riskiest bets yet.
The first electric cars assembled in Saudi Arabia with Lucid Group Inc. twinkled under factory spotlights, designed to show the world how a kingdom built on oil could draw in foreign capital to become a global hub for the industries of the future.
The short-term reality is more complicated. California-based Lucid is increasingly guzzling Saudi money to stay in business. Last week it got a $1 billion cash lifeline from the kingdom, on top of the $5.4 billion Saudi Arabia’s Public Investment Fund (PIF) has already pumped in.
Lucid, which counts the PIF as its top shareholder, had been held up as an example of foreign firms investing in Saudi Arabia’s multi-trillion-dollar “Vision 2030” economic transformation plan. But Lucid’s need for Saudi money is one sign the country’s rushed attempt at reinvention is being paid for out of pocket, with the kingdom relying heavily on its oil riches to entice firms in.
“The government had to give Lucid tremendous incentives to come,” said Karen Young, a Gulf-focused political economist at the Columbia University Center on Global Energy Policy.
It also speaks of the difficulties foreign companies face in Saudi Arabia, a country with little experience of complex manufacturing or heavy industry beyond the petroleum sector.
“Lucid is fully committed to our long-term partnership with the PIF and supporting the goals of Saudi Arabia’s Vision 2030,” Chief Executive Officer Peter Rawlinson said in a statement to Bloomberg. “Lucid is creating hundreds, and eventually thousands, of new employment opportunities for Saudi talent.”
The PIF did not respond to a request for comment.
No comments:
Post a Comment