Shares of Aston Martin were up nearly 12% Monday morning, after the luxury carmaker reached a $232 million deal to enter the electric car market with the help of Lucid Group.
Key Facts
California-based carmaker Lucid Group will get a 3.7% stake in Aston Martin—worth about $US232 million—in exchange for providing the company with the electric vehicle powertrain and battery systems needed to take its fleet electric, Reuters reported.
Aston Martin, which also gets engine and EV technology from an agreement with Mercedes-Benz, plans to release its first hybrid car in 2024 and first electric in 2025, wants to offer every new model in an electric version by 2026 and, by 2030, plans for its core range of vehicles to be fully electric.
The combination of Lucid’s existing technology with Aston Martin’s “internal development” will build a battery-electric platform for use in “hypercars to sports cars and SUVs,” Roberto Fedeli, CTO of Aston Martin, said.
Aston Martin Lagonda shares—which trade in London—had jumped 11.5% by 9:35 a.m. Eastern, and were trading at $US365.
Shares of Lucid, which counts Saudi Arabia’s Public Investment Fund as its main shareholder after a $US3 billion stock offering earlier this month, also jumped more than 9% to $US5.98 as of 9:35 a.m., shortly after U.S. markets opened Monday morning.
Key background
Breaking into the electric vehicle market is a costly move for automakers, who have globally committed around $US1.2 trillion to the low-emission technology, per Reuters.
Small car companies must lean on more reliant partners to make the transition, and Aston Martin has penned deals with several others to make it work.
Mercedes-Benz has a 9% stake in Aston Martin as it continues to help, and Chinese company Geely invested last month, giving access to Geely’s tech and components. Saudi Arabia’s Public Investment Fund also became Aston Martin’s second-largest shareholder last year.
Lucid is among the electric car makers that have struggled amid a recession and price war with Tesla, according to Reuters, cutting its 2023 production forecast last month after lower-than-expected first-quarter revenue.
Big number
$US858 billion. That’s how much the global electric vehicle market is projected to be worth by 2027.
This article was first published on forbes.com and all figures are in USD.
