Aston Martin Lagonda Global Holdings Plc is tying up with Lucid Group Inc. 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 totaling $232 million in exchange for battery-electric powertrain components, the company said in a statement Monday.
The UK manufacturer also extended a longtime cooperation with Mercedes-Benz Group AG, though it will no longer issue more shares to the German company that already owns a roughly 9% stake.
The announcements sent Aston Martin shares surging as much as 15%, 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 have made China’s Zhejiang Geely Holding Group Co. and Saudi Arabia’s Public Investment Fund major shareholders.
The Public Investment Fund, or PIF, owns about 49% of Lucid and 18% of Aston Martin, according to data compiled by Bloomberg.
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 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 totaling $132 million and has committed to spending at least $225 million on the EV maker’s powertrain components. Aston Martin also will pay another $10 million to Lucid for integrating its technology into its vehicles.
