Aston Martin partners with EV maker Lucid, extends Mercedes pact

Image credit: Lucid Motors

Aston Martin Lagonda Global Holdings is tying up with Lucid Group on electric vehicle technology, uniting the storied British carmaker and relative newcomer both backed by Saudi Arabia’s sovereign wealth fund.

Aston Martin will issue new shares to Lucid and make cash payments totalling $232m in exchange for battery-electric powertrain components, the company said in a statement Monday. The UK manufacturer also extended longtime cooperation with Mercedes-Benz Group, though it will no longer issue more shares to the German company that already owns a roughly 9 per cent stake.

The announcements sent Aston Martin shares surging as much as 15 per cent, their biggest intraday jump in more than a month.

“The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin,” Chairman Lawrence Stroll said in a statement. “Based on our strategy and requirements, we selected Lucid, gaining access to the industry’s highest-performance and most innovative technologies for our future BEV products.”

Stroll, 63, is three years into an effort to turn around the British car manufacturer with a long history of financial trouble. Aston Martin has needed several capital raises since he threw the company a lifeline in early 2020, the most recent of which has made China’s Zhejiang Geely Holding Group Co. and Saudi Arabia’s Public Investment Fund significant shareholders.

The Public Investment Fund, or PIF, owns about 49 per cent of Lucid and 18 per cent of Aston Martin, according to data compiled by Bloomberg.

Aston Martin’s longstanding financial woes have made it increasingly reliant on partners for technology other automakers consider core to their products. Models including the DBX sport utility vehicle and DB12 sports car are powered by Mercedes engines.

Going forward, Aston Martin will discuss future access to technology from Mercedes technology and will pay for it in cash, scrapping plans to issue more shares to its partner over the next year.

The Lucid deal will help Aston Martin toward its ambitious electrification targets. The carmaker plans to launch its first plug-in hybrid supercar, the Valhalla, early next year and its first battery-electric vehicle in 2025.

Aston Martin will make phased cash payments to Lucid totalling $132m and has committed to spending at least $225m on the EV maker’s powertrain components. Aston Martin also will pay another $10m to Lucid for integrating its technology into its vehicles.

Read: Saudi-backed electric car maker Lucid plans to raise $3bn