The Aston Martin Lucid Battery Deal Is A Big Bet For The Brand

(CTN News) – Rather than buying batteries from Mercedes-Benz, Aston Martin has struck a deal with Lucid under which the US start-up will take a stake in the struggling luxury car maker.
As a result of the agreement with Lucid, Aston will be able to escape a series of financial commitments it made to Mercedes, which owns a significant stake in the company.

With the group’s pre-tax loss more than doubling last year, Aston has had a rough time on the stock market since its initial public offering in 2018.

Lawrence Stroll, a Canadian tycoon who led an investment in Aston in 2020, is hoping to revive its fortunes and push the company’s transition into an electric vehicle market.

In 2025, Lucid’s batteries and driving units will be incorporated into the automaker’s electric models. Lucid will also receive up to £186 million in cash and shares as part of the technology transfer.

This deal will provide Aston with “access to the most advanced and innovative technologies for our future [battery electric vehicle] products”, according to Stroll.

A highly regarded battery and drivetrain technology is being developed by Lucid under its chief executive officer, Peter Rawlinson, who made his name working on Tesla’s Model S.

Lucid has, however, struggled to produce the technology on a large scale, similar to its rivals.In addition to owning a majority stake in Lucid, the Saudi Arabian sovereign wealth fund also owns a stake in Aston Martin.

By the end of this year, Aston Martin was scheduled to issue new shares and make a substantial payment to Mercedes.In exchange for the payment, Aston would have had access to Mercedes’ new electric car battery systems.

Mercedes and Aston Martin struck the 2020 deal when Aston shares were trading above $12, resulting in a potential windfall for Mercedes.

In spite of the fact that the share price of Aston Martin has recovered from the record low reached last year, it remains below £4. As of Monday morning, they were up six percent.

Among the benefits of the agreement is that Aston Martin now has “access to a wide range of Mercedes-Benz technologies, while at the same time giving the iconic British carmaker the opportunity to explore new opportunities”.

In order to avoid any disruption, Lucid’s payments will be staggered, starting with £26 million and the remainder over the course of 2025 and 2026. Furthermore, Aston has committed to spending at least £177 million purchasing parts from Lucid, as well as an additional £8 million for integration.

In addition to the Lucid agreement, Aston will provide a strategic update on Tuesday during which new targets are expected to be laid out.

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