In a significant expansion of its partnerships in the autonomous vehicle space, Lucid Motors announced Tuesday that Uber Technologies is increasing its order of Lucid Gravity SUVs from 20,000 to 35,000 units for deployment as robotaxis across the United States. The deal, which builds on a collaboration unveiled last year involving Lucid, Uber, and autonomous delivery startup Nuro, also includes Uber boosting its investment in the luxury electric vehicle maker to $500 million. This move comes alongside Lucid appointing a new chief executive officer with a background far removed from the auto industry, signaling potential shifts in the company's leadership and strategic direction.
The expanded agreement marks a deepening commitment to robotaxi services, with the additional 15,000 vehicles set to join a fleet aimed at transforming urban mobility over the next six years. According to Lucid's announcement, the robotaxis will be owned either by Uber or a third-party fleet management partner, with the initial rollout planned for San Francisco. This city has become a testing ground for various autonomous vehicle initiatives, given its dense urban environment and regulatory framework that allows for such deployments under supervision.
Uber and Nuro recently initiated a beta version of the service in the Bay Area, limited to Uber employees. These early tests feature safety drivers behind the wheel, a common precaution in the nascent stages of autonomous tech commercialization. The partnership leverages Nuro's expertise in self-driving systems, which Uber has supported through hundreds of millions of dollars in investments. Lucid, known for its high-end electric sedans like the Air, is pivoting toward producing purpose-built vehicles for ride-hailing fleets with the Gravity SUV.
Financially, the deal provides a timely infusion for Lucid, which has faced challenges in scaling production and achieving profitability amid a competitive electric vehicle market. Uber is adding $200 million to the $300 million it invested last year, bringing its total commitment to $500 million. Separately, Lucid is receiving another $500 million from an affiliate of Saudi Arabia's Public Investment Fund, which already holds a controlling stake in the company. This Saudi backing, which dates back to Lucid's early days, underscores the kingdom's push into green technologies as part of its Vision 2030 diversification strategy.
The investment news arrives as Lucid navigates a turbulent period in the EV sector, where companies like Tesla and Rivian have grappled with softening demand and supply chain hurdles. Lucid's production at its factory in Casa Grande, Arizona, has ramped up slowly since the Air's debut in 2021, with deliveries totaling around 6,000 vehicles last year. The robotaxi deal could help utilize excess capacity and provide a steady revenue stream, though analysts note that autonomous tech timelines often face delays due to regulatory and technical obstacles.
In a parallel development, Lucid revealed the appointment of Silvio Napoli as its new CEO, effective immediately. Napoli, a Swiss-Italian executive, brings over three decades of experience from the world of elevators, escalators, and moving walkways, having led one of the globe's largest companies in that sector. Based in Switzerland, Napoli plans to relocate to the United States to oversee operations, according to a company statement.
This hire concludes a 14-month search for a permanent successor to Peter Rawlinson, who stepped down in February 2023. Rawlinson, a key figure in Lucid's founding, had previously served as chief engineer for the Tesla Model S, bringing credibility to the startup's engineering ambitions. During the interim, Chief Operating Officer Marc Winterhoff assumed the CEO role, focusing on stabilizing production and partnerships.
Napoli's background in vertical transportation—managing complex, safety-critical systems at scale—may offer fresh perspectives on Lucid's challenges in manufacturing and deployment. While not directly from the automotive world, his expertise in global operations and innovation could align with Lucid's goals of expanding into autonomous fleets. The company did not immediately respond to requests for further comment on the selection process, but sources close to the matter described Napoli as a "strategic thinker" suited for Lucid's next growth phase.
The original robotaxi announcement last year highlighted a multi-year plan to deploy thousands of autonomous vehicles, starting with delivery services before expanding to passenger transport. Nuro's pod-like designs, integrated with Lucid's electric powertrains, aim to reduce costs and emissions in last-mile logistics. Uber's involvement positions it to compete with rivals like Waymo, which has been operating commercial robotaxi services in Phoenix and San Francisco since 2020.
Industry observers point to the Bay Area beta as a critical testbed. With safety drivers in place, the service allows Uber to gather data on real-world performance without the full risks of unsupervised operations. California regulators, through the Department of Motor Vehicles, require such human oversight for most autonomous testing, a rule that has slowed but also refined the technology.
Lucid's ties to Saudi Arabia add a layer of geopolitical context to the deal. The Public Investment Fund's stake, valued at billions, has provided Lucid with the capital to build its Arizona plant and develop the Gravity platform. However, it has also drawn scrutiny amid broader discussions on foreign investment in U.S. tech and energy sectors. The additional $500 million infusion could fund further R&D, potentially accelerating the Gravity's production timeline, slated for late 2024.
For Uber, the expanded order reinforces its strategy to outsource vehicle manufacturing while focusing on software and network effects. CEO Dara Khosrowshahi has emphasized partnerships as key to scaling robotaxis, telling investors earlier this year that autonomy could add tens of billions to the company's valuation. Yet, Uber's path has been bumpy, with past investments in self-driving tech like its ATG unit sold off after a fatal 2018 crash in Arizona.
Nuro, meanwhile, has pivoted from consumer deliveries to enterprise solutions, partnering with Uber to target urban freight. The startup's vehicles, lacking traditional steering wheels or pedals, represent a departure from passenger-focused designs but align with Lucid's SUV form factor for versatility.
Looking ahead, the Lucid-Uber-Nuro alliance could reshape ride-hailing economics, potentially lowering costs by 50% or more through autonomy, according to industry estimates. However, challenges remain, including federal guidelines from the National Highway Traffic Safety Administration and public acceptance. As Napoli takes the helm, Lucid faces pressure to deliver on production targets while navigating a market where EV adoption has cooled amid high interest rates.
The announcements cap a busy week for Lucid, which also reported quarterly results showing progress in cost reductions. With these developments, the company positions itself at the intersection of luxury EVs and autonomous mobility, betting on partnerships to drive growth in a fiercely competitive landscape.