Lucid Motors plans to eliminate China from its magnet supply chain this year and is seeking to build ties with Saudi Arabian rare earth suppliers instead, the interim CEO Marc Winterhoff said.
“We are well underway to move completely away from China in 2026, and we welcome additional sources” of magnet supply in Saudi Arabia, Winterhoff told Semafor on Friday.
The CEO said Lucid is interested in output from a rare earths processing plant that US-government backed MP Materials Corp. and Saudi Arabia’s Maaden are planning in the kingdom.
The shift comes after China restricted rare earth exports last year.
Saudi Manufacturing Push
Lucid is increasingly looking to source parts inside Saudi Arabia as it prepares to begin full manufacturing of its first midsize EV at a plant on the kingdom’s west coast by year-end, Winterhoff said.
The company’s Saudi facility currently only assembles kits shipped from its Arizona plant.
The CEO said Lucid expects to start ramping up deliveries on a 50,000-vehicle order from the Saudi government next year once the midsize model enters production.
Saudi Arabia’s Public Investment Fund (PIF) holds more than 60% of Lucid‘s stock and has invested over $9 billion since 2018.
PIF also backs the Saudi-owned EV maker Ceer and Hyundai Motor Co.
Tariff Advantage
The Saudi manufacturing strategy also provides Lucid with a tariff advantage on Chinese components.
As reported by EV in December, Chief Financial Officer Taoufiq Boussaid said producing in Saudi Arabia allows Lucid to source parts from China without facing the 45% duty that would apply if those components were imported to its US facility.
“We found ourselves in a fortunate space having the option to manufacture a car in KSA,” Boussaid said at the UBS Conference in early December.
“What it does is it allows us basically to import from China part of the bill of material without having to incur the significant duty,” Boussaid added.
Chinese-sourced components extend beyond batteries to include “many other equipments,” the CFO said, without specifying which parts.
The next-generation platform will have motors “manufactured and mounted in KSA,” Boussaid added.
Production Timeline
Lucid opened its Saudi assembly plant in September 2023 with initial capacity to assemble 5,000 vehicles annually.
The company plans to begin full production at the facility in late 2026, with a gradual ramp-up through 2027 and 2028.
Full capacity of 150,000 units is targeted for 2029, according to guidance provided by the CFO.
Boussaid said Saudi authorities are developing a dedicated automotive ecosystem that will eventually give Lucid access to nearby Tier 1 and Tier 2 suppliers.
“We will not be alone there,” he said. “The authorities in KSA are very adamant about their plans to develop a fully dedicated ecosystem.”
