Lucid’s Calculated Leap (and Tesla’s Mildly Alarming Plunge)

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The universe, as anyone who’s accidentally looked at it knows, is a profoundly improbable place. And yet, here we are, discussing the business strategies of electric vehicle manufacturers. It’s a bit like explaining quantum physics to a goldfish – technically possible, but the goldfish probably has better things to do. Both Tesla (TSLA 0.04%) and Lucid Motors (LCID 3.58%) are attempting to sell moving metal boxes powered by electricity – a concept that, if you think about it, is still faintly miraculous – but they’re doing so with vastly different approaches. Tesla, in its relentless expansion, appears to be attempting to be everywhere all at once (a strategy fraught with the inherent dangers of spatial distortion and existential fatigue). Lucid, meanwhile, is zigging while Tesla zags, and the reasons, as always, are delightfully complex.

What’s Going On?

Both companies seem to have identified the same potential goldmine: markets where people haven’t quite grasped the brilliance of electric cars yet. India and Saudi Arabia, for example. It’s a bit like discovering a planet inhabited solely by people who’ve never tried tea – a massive, untapped market. However, the way they’re approaching these markets is where things get interesting. Tesla, it seems, has opted for the ‘ship it and see’ method, while Lucid is attempting something… more considered. (More considered often involves digging a very large hole and hoping something useful turns up, but let’s not dwell on that.)

Lucid, in September 2023, opened a manufacturing plant in Saudi Arabia. This wasn’t entirely accidental. It involved a rather substantial financial relationship with the Saudi Arabian Public Investment Fund (PIF), who now own a near 60% stake in Lucid. (One can only imagine the boardroom discussions. Probably involved a lot of charts and a disconcerting amount of sand.) The plant, currently in a state of partial assembly (think of it as a very large, slightly incomplete Lego set), is slated to reach full-scale production by 2026, with a planned capacity of 150,000 vehicles by 2029. This is, of course, assuming that the laws of physics remain consistent and nobody accidentally invents a teleportation device.

The idea is simple, in theory: establish a foothold in a rapidly developing market, benefit from Saudi Arabia’s Vision 2030 (a plan to reduce reliance on oil, which is rather ironic, when you think about it), and take advantage of the automotive export hub being established on the Red Sea. Tax exemptions and zero custom duties in Special Economic Zones (SEZs) are also rather helpful. It’s a bit like finding a loophole in the fabric of reality – you’d be foolish not to exploit it. (Although, exploiting loopholes often leads to unexpected consequences. See: the entire history of humanity.)

Lucid is betting that investing in local production will shield it from potential tariff setbacks and establish a strong brand presence early on. Tesla, meanwhile, is facing the consequences of importing vehicles into India, where import duties can reach a staggering 110%. The Model Y, as a result, starts at nearly $70,000, and reports suggest the company is offering substantial discounts to clear unsold inventory. It’s a situation that could be described as… suboptimal. (Or, if you’re feeling particularly dramatic, a cautionary tale.)

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What It All Means for Potential Lucid Investors

Now, before you rush out and mortgage your house to buy Lucid stock, a word of caution. This isn’t a guaranteed path to instant riches. This is a long-term play, driven by a vision of future growth in a market that is currently… shall we say, under-electrified. While the developing market holds potential, it’s also a strategic move to strengthen Lucid’s relationship with its largest stakeholder, Saudi Arabia’s PIF. The PIF has already invested $8 billion since 2018, and maintaining that connection will be crucial, as Lucid will almost certainly require additional capital in the future. (Capital, in the world of business, is rather like oxygen – essential for survival.)

From an investor’s perspective, Lucid’s approach appears more calculated, less reliant on hoping for the best. It’s a risky strategy, of course. All strategies are, when you consider the inherent unpredictability of the universe. But it’s a risk that, at least, seems to have been carefully considered. (Or, at least, considered with a slightly higher degree of rationality than, say, attempting to build a spaceship out of cardboard boxes.) It’s a fascinating situation, and one that bears watching. After all, in the grand scheme of things, we’re all just hurtling through space on a tiny blue marble, trying to make sense of it all. And sometimes, the most improbable strategies are the ones that actually work.

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2026-01-25 23:02