EV maker Lucid Motors will begin using US-made batteries from supplier Panasonic Holdings Corp. by mid-2026, a move aimed at avoiding tariffs on components imported from Asia.
Interim CEO Marc Winterhoff disclosed the timeline in a Bloomberg interview on Tuesday, as the California-based EV maker works to localize its supply chain amid ongoing trade tensions.
Lucid currently sources batteries from Asia despite assembling all of its vehicles in the United States.
“All of our vehicles right now are built in the United States, but still we have components coming from other parts of the world,” Winterhoff said. “And we are in the process to localize this in order not to have to pay the tariffs.”
“One very big element of our bill of material is the batteries. And right now they come either from Korea or a bigger chunk actually from Japan,” he added.
The shift to domestic battery supply will mark a significant change for Lucid. “And we will localize this to the United States mid of this year. So that will actually help already quite a bit. But there’s still more work to do,” Winterhoff said.
The interim chief spoke amid Lucid‘s announcement at CES of a production-intent robotaxi developed with Nvidia and the autonomous driving startup Nuro.
Panasonic Partnership
Lucid and Panasonic Energy announced a battery supply agreement in December 2022 for the Lucid Air sedan.
In January 2025, Lucid said its Gravity Grand Touring SUV would also be powered by Panasonic’s lithium-ion cells.
Last July, Winterhoff said the company was working with Panasonic to source more of its cell supply’s raw materials in the US during a visit to Panasonic’s newest American battery plant in De Soto, Kansas.
Raw Materials Push
Lucid has signed several agreements to secure American-sourced raw materials for its battery supply chain.
Last June, the company signed a multi-year supply agreement with Graphite One for American-sourced natural graphite.
Combined with earlier agreements with Syrah Resources, future Lucid vehicles will increasingly utilize natural and high-performance synthetic graphite materials mined and produced at facilities in the United States as part of directed supply agreements with the company’s battery cell suppliers.
Saudi Arabia Strategy
While Lucid localizes battery production to the US, the company is taking a different approach for its upcoming midsize crossover — producing it in Saudi Arabia to source components from China without facing tariffs.
Chief Financial Officer Taoufiq Boussaid said in early December that the Saudi production strategy positions Lucid to avoid the significant duty burden that would apply to parts imported from China.
“We found ourselves in a fortunate space having the option to manufacture a car in KSA [Kingdom of Saudi Arabia]. And what it does is that it allows us basically to import from China part of the bill of material without having to incur the significant duty,” Boussaid said at the UBS Conference.
By producing in Saudi Arabia, Lucid avoids the 45% tariff on Chinese auto parts that would apply if it imported those components to its US facility.
In April, the US briefly raised tariffs on Chinese goods to 145% during an escalating trade dispute.
A month later, both countries reached an agreement reducing US tariffs on Chinese goods to 30% and Chinese tariffs on US goods to 10%, though certain sectors including automobiles remain subject to higher rates.
Midsize Model Timeline
Lucid plans to begin production of its midsize crossover in late 2026, with a gradual ramp-up through 2027 and 2028, reaching full capacity in 2029, according to CFO guidance.
The next-generation platform will have motors “manufactured and mounted in KSA,” Boussaid said, adding that Chinese-sourced components extend beyond batteries to include “many other equipments.”
Lucid opened its assembly plant in Saudi Arabia in September 2023 with an initial capacity of 5,000 vehicles annually.
