U.S. luxury electric vehicle firm, Lucid Group (NASDAQ:LCID) revealed Wednesday that the automaker will pursue more deals to sell its equipment as the company looks to expand its growing technology supply business, CEO Peter Rawlinson said on Wednesday, adding its recent deal with Aston Martin (LON:AML) is just the start.
On Monday, Lucid made an announcement stating that they have entered into an agreement to supply Aston Martin with advanced technology. This includes a rear drive unit equipped with twin motors, battery modules, and software designed for seamless integration of various systems.
Parts for this agreement will be supplied by the company’s Arizona plant.
"This (deal) really kicks off that wing of the Lucid Group's business," said Rawlinson.
Lucid's initial focus will be on providing high-performance, ultra-high voltage technology that would not be suitable for the mass market, reflected in the Aston deal, Rawlinson said. However, he continued, its business licensing out parts should grow as the company moves to more mass-market models.
Lucid, like its competitors, has been grappling with increasing losses, limited cash reserves, and a price war triggered by Tesla (NASDAQ:TSLA). However, the company stands to benefit from its expanding business of supplying technology to other entities. This diversification in revenue streams can potentially aid Lucid in overcoming its financial challenges and gaining a stronger footing in the market.
"Do we ever want to make a $25,000 car because that's what it's going to take to change the world?" Rawlinson said.
"I'm not sure if we want to be in that business, but licensing our tech to a company that could do that makes more sense."
Aston and Lucid share a common shareholder in Saudi Arabia's Public Investment Fund (PIF), but Rawlinson said the Saudi wealth fund played no role in the deal.
"Aston Martin had options and they chose quite independently what they felt is the best technology available on the planet," he added.
Shares of LCID are down 1.31% in premarket trading on Wednesday.