Electric carmaker Lucid Motors Inc. is raising a new round of financing and is also considering an outright sale after holding early-stage takeover talks with Ford Motor Co., according to people familiar with the situation. The Menlo Park, California-based firm has hired Morgan Stanley to help raise more money to pay for further development of its vehicle and a new manufacturing plant in Arizona, the people said. They asked not to be identified talking about private company matters.
Lucid approached the senior management of Ford about a possible sale, the people added. Ford is not looking for a deal at this time, one of the people said, as new Chief Executive Officer Jim Hackett is in the midst of a 100-day review of the company’s plans and priorities. Founded in 2007, Lucid said it’s targeting 2019 to begin production of its all-electric luxury sedan, after earlier saying it would start in 2018. Staffed by many engineers from rival Tesla Inc., Lucid released a video in July showing its Air production model hitting speeds of 235 miles per hour. The vehicle will start at $60,000.
Lucid, which originally focused on making battery packs for electric buses in China, has raised more than $100 million from Asian investors, including Tsing Capital and Mitsui & Co. Silicon Valley venture capital firm Venrock is also a backer. Lucid is working on its fourth funding round, known as a Series D.
“We don’t have the money in place. That’s why we need to secure Series D,” Chief Technology Officer Peter Rawlinson said at the New York International Auto Show in April. “It would be irresponsible to start moving earth or start anything until we have a financial runway to execute that professionally and with absolute integrity.” The Arizona plant is expected to need $700 million in investment by 2022.
In an interview with Bloomberg News, Rawlinson said Lucid is "thrilled with the response from investors." He declined to comment on the scale of the fundraising, or the talks with Ford.
"We don’t comment on speculation," Karen Hampton, a Ford spokeswoman, said in an email. A representative for Morgan Stanley didn’t immediately respond to a request for comment.
In May, Ford’s board of directors ousted Mark Fields and installed Hackett, the former CEO of office furniture maker Steelcase Inc., who has ties to Silicon Valley and had most recently been running Ford’s foray into self-driving cars. The board was unhappy with the pace of change under Fields and the nearly 40 percent decline in the company’s share price on his watch. Ford is not ruling out a deal down the road, according to one of the people. The automaker has big plans to bring out plug-in cars and hybrids. It is spending $4.5 billion to electrify 40 percent of its lineup by 2020. Rival General Motors already has a long-range electric vehicle on the market. Ford also has promised to put autonomous cars on the road by 2021. They’re expected to be battery powered. In February, Ford said it was investing $1 billion in Argo AI, a startup run by former Google and Uber executives that is developing self-driving software.