Aston Martin - comment
The announcement from AML this morning represents significant moves in the chess pieces. AML will use the EV powertrain technology from Lucid to drive its first full EV (due in 2025). The cash outlay by AML of $132m + $100m in equity is for integration and supply agreements. The amounts are manageable, and the Lucid technology is proven in its own performance vehicles. Financially it is safer than AML developing its own EV powertrain. We are preparing a more detailed email on these developments, which will be out soon.
PIF is subscribing for $1.8bn of Lucid’s $3bn public offering (the remaining $1.2bn is underwritten by BofA). Finding a high-end customer for Lucid is a good move. The deal with (PIF-controlled) Lucid for the EV powertrain will cost AML $33m in cash now and $99m over 2025 and 2026.
Mercedes has agreed not to enforce any rights it had arising from the Lucid deal. The strategic agreement between Mercedes-Benz AMG and AML has been changed from technology for shares to technology for cash. Whether AMG stays on board to work on customising the Lucid technology or focuses on the non-electric fleet is unclear.
Geely will be happy that AML has found a low-risk EV powertrain solution. We still expect Geely to take control of AML but do not see this as imminent.