California US EV pure play Lucid hopes to expand revenue sources beyond its core EV production with further powertrain licensing deals. The firm announced the first such licensing agreement with UK luxury OEM Aston Martin in late June.
The agreement will provide Lucid with a technology access fee of $232mn, comprising of $100mn in Aston Martin shares and aggregate cash payments of $13mn, according to the firm’s CFO Sherry House, as well as engineering integration fees and an Aston Martin commitment to a minimum spend with Lucid on powertrain components of $225mn.
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“Monetising Lucid's award-winning technology is a key part of our forward strategy, and we are delighted to commence this new arm of our business with a partner as well respected as Aston Martin,” says CEO Peter Rawlinson. “This is not an automotive supplier type of contract. This is a technology play,” he stresses.
More to come
The deal “seems like it might be the tip of the spear of things to come on selling the powertrain technology or licensing it”, suggests John Murphy, lead US auto analyst at Bank of America. “This agreement represents the advent of a core pillar of Lucid Group, namely our technology supply and licensing, and in so doing, reaffirms the commercial value of our patented technologies,” agrees Rawlinson.
“We believe this could represent a harbinger of future opportunities not only in applications for the automotive market but also in markets such as commercial transportation and even aviation.”
The firm is “in dialogue with a number of parties” on similar deals but is “not proactively reaching out to anybody”. “I am open to dialogue with any other interested party that may come along,” says Rawlinson.
And he is keen to stress how Lucid’s technical advantages give it both a current attractiveness for partnership agreements, but also a future edge both for its own EV plans and additional third-party agreements. As an example, Lucid’s forthcoming Air Pure rear-wheel drive model will be able to achieve an Environmental Protection Agency range of 419 miles with an 88kWh battery pack.
“Let me do the quick math for you,” says Rawlinson. “This equates to an efficiency of approximately 4.74 miles/kWh. At 4.74 miles/kWh, the single-motor Lucid Air Pure tops every other EV on the U.S. market.” This chimes with research by Chris Pierce, senior analyst at investment bank Needham & Company, which puts Lucid top of the battery capacity-to-range efficiency table.
“Lucid has an advantage for now, but how long before others go and catch up? My reply to this is always the same. Far from this gap shrinking, we are working assiduously to grow that gap because it is critical to the planet that we achieve higher-efficiency EVs,” Rawlinson continues.
Lucid’s 4.74 miles/kWh achievement is, in its CEO’s view, “testament to that”. “We will not stop pushing the envelope on our technology,” he promises.
More affordable
And that should manifest itself in more deals for both its existing and future technology. “What really excites me is the technology that enables this 4.74 miles/kWh for Air will, in turn, enable more affordable products in the future,” Rawlinson continues.
“The technology we have got today suits higher-end products. In a few years' time we will be in a situation where we could countenance a partnership for a more mainstream product, when we get the midsized platform technology ready," he says.
The midsized Lucid EV which the firm plans to build off this new platform is “on schedule for mid- to late-decade”. “The car is going to be a global vehicle,” says Rawlinson.
“We are going to make it much more accessible in terms of its price point. And this was always the strategy — the vision of Lucid — to start with the high-end product we are seeing with Air and Gravity to develop the world's most advanced technology, and then to use that to deploy it to make electric cars more attainable.
“As we come progressively downmarket into a more accessible place, our powertrain technology will become more affordable,” Rawlinson predicts — which could mean future partners more mainstream than Aston Martin. “I believe the market will come to us. It is little known the vast majority of car companies today are just buying their powertrain from other companies.
“We are one of maybe two or three that are vertically integrated. We believe that we are about at least three years ahead of the nearest competitor. And that nearest competitor is probably many, many years ahead of their closest competitor in terms of core EV technology,” says the Lucid chief.
“A lot of the traditional car companies are starting to look at this, but frankly, they are way behind. A number of these traditional car companies are going to be left behind. That will be a real opportune moment for us as they seek to get on to the electric vehicle bandwagon, which will be a juggernaut by then,” he predicts.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
