American electric car company Lucid plans to enter the European and Middle Eastern markets in 2025, mass-produce its first electric SUV Gravity, gradually increase the production capacity of its Saudi Arabian factory, and build a new factory with an annual production capacity of 150,000 vehicles in 2026.

Lucid’s strategic move to accelerate its global expansion is an important move driven by its technological advantages, capital support and market demand.

Core technology barriers

Lucid has built a differentiated technological advantage with its Silicon Valley genes. Its self-developed 900V high-voltage platform, ultra-efficient motor (30% smaller than competitors but 20% more powerful) and intelligent energy management system have enabled Lucid Air to set a record for mass-produced electric vehicles with a range of 832 kilometers (EPA). Gravity SUV continues its technological advantages, equipped with 828 horsepower dual motors, supports 400kW supercharging (320 kilometers of energy in 12 minutes), and has a range of 708 kilometers (EPA). At the same time, it accurately targets high-end family users and off-road scenarios by optimizing aerodynamic design (drag coefficient 0.24) and space layout (third row legroom over 1 meter).

Product line expansion strategy

Extending from high-end sedans to the SUV market, the mass production of Gravity fills the gap in Lucid’s family car field. Its starting price of $79,900 (Touring version) is lower than Tesla Model X (starting at $99,900), and it competes for the mainstream luxury market through the “technology inclusiveness” strategy. At the same time, Lucid plans to launch the Earth, a mid-size SUV based on the Atlas drive unit, in 2026, further down to the $40,000-50,000 range, covering a wider consumer group.

Capacity and cost optimization

The Saudi AMP-2 plant adopts the SKD (semi-bulk assembly) production model, with an initial annual production capacity of 5,000 vehicles, mainly assembling parts imported from the United States. After the new plant is put into production in 2026, it will achieve an annual production capacity of 150,000 vehicles. Localized production can enjoy the $3.4 billion financing and tax incentives provided by the Saudi government. It is expected that the cost of the whole vehicle will be reduced by 18%-22%, while avoiding the EU’s 35% tariff on imported electric vehicles, creating a price advantage for exports to Europe.

Geopolitics and resource integration

The Saudi Public Investment Fund (PIF) holds a 60% stake, which is deeply tied to the development of Lucid. In addition to financial support, PIF also promotes Lucid to cooperate with local companies to build a battery factory, and incorporates it into the transportation plan of the NEOM future city, providing Lucid with a stable government procurement order (100,000 vehicles in 10 years). This “technology + resources” binding model makes Lucid a benchmark project for Saudi Arabia’s energy transformation, and obtains policy support and market access priority.

Europe: Technology benchmarking and ecological synergy

Charging network breakthrough: Lucid announced that all models will be equipped with NACS connectors as standard in 2025, connected to Tesla’s supercharging network (more than 25,000 charging piles in Europe), solving users’ energy replenishment anxiety. At the same time, it cooperates with European charging operator E.ON to build brand-exclusive charging stations in core markets such as Germany and the Netherlands, and plans to cover major highways by the end of 2025.

Intelligent driving adaptation: In response to complex road conditions in Europe, Gravity will be equipped with an upgraded version of the DreamDrive Pro system, which supports automatic lane change, traffic congestion assistance and other functions, and plans to achieve Level 3 autonomous driving through OTA upgrades.

Price positioning: The Gravity Touring version is priced at about 85,000 euros in Germany, 15% lower than the BMW iX xDrive50 (99,900 euros), and competes for BBA users through the strategy of “performance premium + price advantage”.

Middle East: Policy dividends and high-end market

Policy-driven demand: Saudi Arabia’s “Vision 2030” sets a goal of electric vehicles accounting for 30% of new car sales, and provides a maximum of 50,000 Saudi riyals (about 9,500 yuan) in car purchase subsidies. The UAE exempts electric vehicles from import taxes and builds more than 2,000 public charging piles in cities such as Dubai and Abu Dhabi.

Localized operation: Lucid launched the “Desert Mode” battery temperature control system in Saudi Arabia, which can adapt to a high temperature environment of 55°C, and cooperated with local luxury hotels to establish an exclusive charging network. Its customized models (such as the extended version of Gravity) in cooperation with the Middle Eastern royal family have received the first batch of 500 orders.

Competition: Chinese brands such as BYD and NIO seize the low-end and mid-range markets through cost-effectiveness, while Lucid has formed a differentiated advantage in the high-end market of more than $100,000 with its technology premium and localized services. In Q1 2024, Lucid’s revenue in the Middle East market increased by 1,310% year-on-year, becoming the fastest growing luxury electric vehicle brand.

Capacity ramp-up and capital pressure

Although the delivery volume reached 3,100 vehicles in Q1 2025 (year-on-year + 45%), Lucid still faces a capacity bottleneck. The capacity utilization rate of the AMP-1 plant in the United States is less than 50%, and the delivery of the Saudi plant was delayed due to supply chain problems, resulting in a net loss of US$2.714 billion in 2024. Although its working capital can support it until 2026, it needs to be further financed through IPO or strategic cooperation.

Market competition is fierce

In the European market, Tesla Model Y continues to dominate the list, while BMW iX and Mercedes-Benz EQE SUV are accelerating their iterations; the Middle East market faces price shocks from BYD Seal and NIO ET7. Lucid needs to catch up quickly in terms of brand awareness and service network.

Geopolitical uncertainty

The fluctuations in the situation in the Middle East may affect the construction progress of the Saudi Arabian factory, while the trade barriers to imported electric vehicles in the European market (such as EU carbon tariffs) may weaken Lucid’s cost advantage. In addition, Tesla’s squeeze of market share through price wars may force Lucid to further cut prices, exacerbating profit pressure.

Lucid’s global layout marks the entry of the high-end electric vehicle market into a new stage of “technology + geography” competition:

Demonstration effect on the industry: its “US R&D + Saudi manufacturing + global sales” model provides a resource integration model for emerging car companies;

Impact on traditional luxury brands: Lucid forces BBA to accelerate its electrification transformation through technological dimensionality reduction (such as battery life and charging speed);

Reshaping the Middle East industry: Saudi Arabia attracts Foxconn, BMW and other companies to settle in through the construction of Lucid factories, gradually building a full electric vehicle industry chain and promoting economic diversification.

Lucid’s global expansion is a multiple game of technological innovation, capital operation and geopolitical strategy. In the short term, the release of Saudi Arabian factory capacity and Gravity market acceptance are the key; in the long term, it needs to continue to make breakthroughs in mid-end market layout, supply chain localization and brand value enhancement. If resources can be effectively integrated, Lucid is expected to become the second pure electric brand to achieve global layout after Tesla, but it needs to be vigilant against the dual challenges of market competition and capital chain risks.