⚡️How Saudi investors brought EV disruption to the US

Happy Monday. As September 21st marked the last day of summer, this is the 1st Fall Edition of Electric Avenue. Look forward to golden leaves falling and cozy EV news coming to your inbox.

Here`s what we have for you today:

• EV & Charging stock performance

• 1 Pic

• 1 Deep Dive

• 3 Links

• Meme of the Week

After brief recovery since the last edition, growth and EV stocks are now down significantly. The fall blues must have caught on.

1 Pic

It`s finally here! Over the past week, Tesla launched the long-awaited Tesla-CCS1 adapter on the North American ecommerce store. This equipment will allow owners of Tesla vehicles to charge their cars at 3rd party charging networks such as EvGo, Chargepoint and Electrify America. This is in addition to the Tesla Supercharger network, which is currently still exclusive to Tesla owners in NA. Here are what we know based on the adapter manual:

• Supports up to 500V DC and up 250kW charging rate --> This means that the adapter should support the full 500A maximum current rating that CCS charging stations can output.

• Earlier model years of Tesla vehicles may require a retrofit on the vehicle side, to be compatible with the adapter.

• When checking compatibility for a early 2020 Tesla Model 3, we were advised that this model would require a retrofit and this would not be available prior to "early 2023" --> Initially, only a part of the existing Tesla fleet in North America will be able to make use of the CCS infrastructure.

1 Deep Dive - How Saudi investors brought EV disruption to the US

Tesla, Rivian, Lucid - the names of these EV "challenger" startups are widely known. Their traction and brand recognition have greatly contributed to the increase in EV sales in North America. What`s not commonly known is that all three companies have received major funding from Saudi Arabian investors over their history:

#1 Lucid

Initial funding for Lucid Motors (founded in 2009 as "Atieva"), came from traditional VC firms such as Venrock as well as Chinese investors such as BAIC. But in 2018, when Lucid was looking to raise funding to bring the Air into production, the Public Investment Fund (PIF) of Saudia Arabia invested >$1B into the company. As of Lucid`s debut on the public markets last year, PIF actually owned a majority stake (~63%) in the company. The PIF investment was worth ~$46B as of Nov 2021. That has gone down dramatically as all growth stocks lost value this year, but PIF has stayed committed to Lucid and did not sell a share. Additionally, the Kingdom of Saudia Arabia placed an order for 100,000 vehicles with Lucid Motors in 2022 and provided the company with $3B in incentives to build a factory in the country. 

#2 Tesla

At the same time that PIF was negotiating with Lucid, the fund also made a large investment into Tesla and at one point held a stake representing ~5% of the company. However, that relationship became strained over Elon Musk`s infamous "$420" tweet. Thanks to the ongoing lawsuits around this, we now have the text receipts showing the relationship disintegrating. In fact, PIF dumped nearly all of its Tesla shares in early 2020, soon enough to miss out on the massive rally that Tesla stock has had since then.

#3 Rivian

RJ Scaringe recently did an interview with the How I Built This Podcast. The Rivian CEO talked about the over a decade long journey of his company. For most of this time Rivian was actually in stealth mode and there are little to know media reports on the company from 2013 to 2017. It was during this time, that RJ got introduced to Abdul Latif Jameel (ALJ). ALJ is a Saudi Arabian conglomerate that is over 75 years old. The company is named after its founder and is best known as a local importer and dealership operator for Toyota in many African and Middle Eastern countries. ALJ`s interesting history was detailed in this interview with McKinsey. In here, Hassan Jameel tells the story of how they met RJ during Rivian`s fundraising efforts as far back as 2012. Over several years, ALJ invested ~$303M in several tranches into Rivian and worked closely with RJ while the company was on stealth. As of Rivian`s IPO in 2021, ALJs stake in the company was worth $11.5b.

Takeaways

• Saudi Arabian investors started looking at Electric Vehicle investments as far back as 2012.

• As of their public market debuts in 2021, Saudi investors were among the largest shareholders in both Rivian and Lucid Motors - without their involvement we may not have seen these two companies make it this far.

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• Rivian factory charging: RJ Scaringe, the CEO of Rivian, posted this video from their Illinois factory. It shows charging happening in the factory parking lot. The EVs are weather-protected by canopies and charged using Rivian`s inhouse-developed overhead fleet charging system. It`s always great to be your own first and best customer for a new product. Rivian is taking a page out of the playbook of their investor Amazon and AWS here.

• China EV tax break: Chinese authorities announced that New Energy Vehicles (BEVs, FCEVs and PHEVs) will continue to be exempt from purchase taxes in 2023. Compared to a similarly priced gasoline car, EV buyers can save about 10,000 yuan or the equivalent of ~1,400 USD.

• California charger uptime bill: This interesting bill was just signed into California law. The government will develop a common definition of public charger uptime through workshops and monitor it for stations that are installed from 2024 on + receive public funding. This is a positive development, as public incentives were mostly tied to *deployment* in the past while neglecting uptime requirements. This led to poorly maintained stations and driver frustrations.

Meme of the Week

DISCLAIMER: None of this is financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.