Aston Martin Turns To A US Startup For EV Help

The EV revolution continues to evolve and the momentum is strong across the automotive industry with EV king, Tesla Inc TSLA still leading the way. In what is deemed as a landmark collaboration, Aston Martin Lagonda Global Holdings ARGGYAMGDF will be getting help from Lucid Group Inc LCID through powertrain components and systems to accelerate its high-performance EV strategy. In return for accessing its technology, Lucid will gain a 3.7% stake, becoming a shareholder of the British luxury automaker. 

Why Did Aston Matin Choose Lucid?

Lucid won the 2023 World Luxury Car Award with Lucid Air through which the startup achieved a revolutionary 516-mile EPA-estimated range. Aston Martin will gain access to world-leading electric powertrain technology that Lucid engineered and that it manufactures in-house. Besides powering its EVs, Lucid will also provide technical support in integrating its proprietary technology a new EV platform that Aston Martin is developing as well as supply the components such as advances electric powertrain technologies that include the ultra-high performance twin motor unit, impressive battery technology and revolutionary Wunderbox that altogether extend the car’s capabilities.  In simple words, Lucid’s technology will propel Aston Martin to launch its first all-electric model in 2025 while supporting its sustainability strategy coined as Racing.Green.

The Relationship Is The First Of Its Kind For Lucid

Aston Martin will be issuing 28.4 million new ordinary shares to Lucid upon shareholder approval, along with making cash payments that add up to about $232 million. Like its EV startup peers, Lucid is struggling with mounting losses and melting cash reserves as it posted a big top line miss for its first quarter in a climate shaped by recession fears and price war that got started by Tesla.  As its first quarter net loss widened to $779.5 million, the luxury Air sedan maker trimmed its 2023 production forecast to over 10,000 units while it previously guided for a range between 10,000 and 14,000 units. Therefore, this agreement, which is the first of its kind for Lucid, will provide it with the financial stability it can greatly benefit from.

Partnerships Are Key

The EV shift is undoubtedly scary and costly, with automakers across the globe committing about $1.2 trillion to make this transition. Even bigger carmakers General Motors GM and Ford Motor F realized they are better off joining Tesla and its charging network. Even the mighty Tesla gained form this agreement as by opening its network of superchargers, it is gaining eligibility for billions of dollars in federal subsidies.

Until now, Aston Martin was leaning on Mercedes Benz Group AG MBGAF for technology and engines as part of an agreement made in 2020. Aston was due to issue fresh shares and make a large payment to Mercedes by the end of the year but in a separate announcement today, Aston stated that Mercedes will only maintain around 9% stake and continue to provide the company with access to engine and EV technology.

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