Aston Martin struck a strategic supply agreement for high performance EVs that will see the U.S.-based Lucid Group getting a roughly 3.7 percent stake in the U.K. automaker.
As part of the agreement, Aston Martin will issue about 28.4 million new ordinary shares to Lucid, which will also get phased cash payments, totaling an aggregated value of approximately $232 million.
The two automakers have a common shareholder in Saudi Arabia’s Public Investment Fund.
Access to Lucid’s current and future powertrain and battery technology will be at the center of Aston Martin’s all-new in-house EV platform, Aston Martin said in a statement on Monday.
“Combined with our internal development, this will allow us to create a single bespoke BEV platform suitable for all future Aston Martin products, all the way from hypercars to sports cars and SUVs,” Aston Martin’s Chief Technology Officer, Roberto Fedeli, said in the statement.
The shift to electric is phenomenally costly, with automakers globally committing around $1.2 trillion to the low-emission technology. Smaller automakers such as Aston Martin are more reliant on partnerships to make the transition.
Aston Martin will make phased cash payments to Lucid totalling $132 million and has committed to spending at least $225 million on the EV maker’s powertrain components. It will also pay another $10 million to Lucid for integrating its technology into its vehicles.
Aston Martin has said it will reveal a future lineup this summer that includes a full-electric car in 2025. The automaker’s Valhalla plug-in hybrid hypercar, which was unveiled in 2021, is now expected in 2024.
Mercedes tech
Until now Aston Martin has relied on Mercedes-Benz as its “big brother” to provide the technology it needs.
In a separate announcement on Monday, Aston Martin said it had amended an agreement with Mercedes meaning the German automaker will not increase its stake as planned.
Mercedes will maintain around 9 percent in Aston Martin and continue to provide it with access to engine and EV technology. Going forward, Aston Martin will pay for Mercedes technology in cash.
Aston Martin’s longstanding financial woes have made it increasingly reliant on partners for technology that other automakers consider core to their products. Models including the DBX SUV and DB12 sports car are powered by Mercedes engines.
Common shareholder
Lucid and Aston Martin have a common shareholder in Saudi Arabia’s Public Investment Fund (PIF). The Saudi wealth fund became Aston Martin’s second-largest shareholder last year.
PIF is also Lucid’s main shareholder and last month provided a majority of the funds for a $3 billion stock offering by the U.S. EV maker.
Those additional funds are critical as Lucid, like its peers, struggles with mounting losses and tightening cash reserves in the face of recession fears and a price war sparked by market leader Tesla.
Lucid, which makes luxury Air sedans, trimmed its 2023 production forecast last month and reported a lower-than-expected first-quarter revenue.
Reuters and Bloomberg contributed to this report