Saudi Fund Investing $1B in Tesla Rival Lucid Motors

The Saudi Kingdom's Public Investment Fund (PIF) is not willing to bankroll Tesla Inc.’s (TSLA) plans to go private after all. However, the official sovereign wealth fund of the Saudi Arabian government is investing in Tesla rival Lucid Motors Inc.

The revelation comes a month after Tesla CEO Elon Musk controversially tweeted that he was considering a $420 per share take-private deal after receiving assurances that PIF was eager to provide the necessary funding.  (See also: Elon Musk Opens up About the "Excruciating" Year He's Had.)

"The transaction represents a major milestone for Lucid and will provide the company with the necessary funding to commercially launch its first electric vehicle, the Lucid Air, in 2020," said the private, Newark, California-based company in a statement. "Lucid plans to use the funding to complete engineering development and testing of the Lucid Air, construct its factory in Casa Grande, Arizona, begin the global rollout of its retail strategy starting in North America, and enter production for the Lucid Air."

Lucid Motors, which was founded in 2007 by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former exec at Oracle Corp. (ORCL) and Redback Networks, has yet to sell any cars. The company is currently accepting refundable deposits of $2,500 from consumers on its website for its $100,000 Lucid Air, although an official release date for the luxury sedan has not been provided.

A spokesperson for PIF said, “By investing in the rapidly expanding electric vehicle market, PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development, and driving revenue and sectoral diversification for the Kingdom of Saudi Arabia.”

On August 24, Musk announced he decided to keep Tesla public after discussions with shareholders and Tesla's board of directors. He also added that his "belief that there is more than enough funding to take Tesla private was reinforced during this process." He has been accused of fraudulently misleading investors with his "funding secured" tweet in order to drive up Tesla's share price. PIF reportedly bought a below 5% stake in Tesla in August. (See also: Tesla's Global Finance Head Quits)