Luxury electric vehicle maker Lucid Motors opened a manufacturing plant in Saudi Arabia two years ago in part to fulfill a major purchase order with the country. Now, the facility may serve another purpose: avoiding American tariffs.
Speaking at the UBS Global Industrials and Transportation Conference in Florida on Wednesday, Lucid Motors CFO Taoufiq Boussaid said his Newark, California-based company intends to build its next-generation line of midsize vehicles at the Saudi Arabia plant.
“We found ourselves in a fortunate space having the option to manufacture a car in [the Kingdom of Saudi Arabia],” he said. “It allows us basically to import from China part of the bill of materials without having to incur the significant duty.”
The company’s move is just one of the many ways American businesses are exploring novel means to circumvent some of the highest tariffs in U.S. history. Counter to the Trump administration’s intended purpose of spurring domestic manufacturing, some businesses are instead looking to reshore some manufacturing operations entirely.
In a November survey by the Supply Chain Management, for instance, one unnamed transportation equipment company respondent said the business was “starting to institute more permanent changes due to the tariff environment.”
“This includes reduction of staff, new guidance to shareholders and development of additional offshore manufacturing that would have otherwise been for U.S. export,” the respondent wrote.
Still, Boussaid noted that other manufacturers are aiming to relocate their supply chains to North America, but it’s “not something that can happen overnight.” And he said the company will, “for the time being,” continue to produce its motors at its plant in Arizona. But, eventually, it intends to build motors for its new line of vehicles in Saudi Arabia.
Boussaid said the company aims to start production at the Saudi Arabia facility toward the end of 2026, with a ramp-up to full capacity in the following two years.
Lucid’s moves come at a perilous time for the electric vehicle industry, at least in the United States. The expiration of a federal tax credit for EVs at the end of September led to a big dip in sales of both new and used electric cars the following months, Cox Automotive reported last month. New EV sales in October dropped as much as 48.9% compared to September, while used EV sales fell about 20%.
But Boussaid maintained that his business is seeing “very positive momentum in Europe and the Middle East” for its existing Gravity SUV.
Generally speaking, Boussaid said the market for premium EVs has “turned out to be much more resilient than some of the other EV segments.”
“On top of that … we’ve been seeing a constant and very pleasing improvement in terms of market share,” he said. “Indicators are green.”
That’s not to say Lucid hasn’t had its own struggles. The company reported a net loss of $978.4 million in its third quarter, missing Wall Street’s expectations for two consecutive quarters, CNBC reported.
Correction: This article has been updated to correct the location of the company’s motor manufacturing plant, which is in Arizona. This article has also been updated to clarify Lucid Motors’ existing manufacturing investment in Saudi Arabia.
