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Lucid Group (NASDAQ:LCID), a retailer of luxury EVs as well as advanced battery tech, stands to gain quite a lot should it manage to win a lucrative Saudi contract.
As per an interview by the CEO of Saudi Arabia’s Red Sea project as well as the Amaala luxury tourism initiative, John Pagano, the Kingdom is looking to build “the largest battery storage system in the world.” The video embedded in the tweet below is in English.
“سنبني أضخم نظام تخزين بطاريات في العالم "
حديث للرئيس التنفيذي لمشروع البحر الأحمر ومشروع وآمالا في #السعودية عن مساهمة المشروعين في تنمية قطاعات جديدة بالإضافة للقطاع السياحي في المملكة، وعن مفهوم "السياحة المتجددة" ودوره في تطوير مشروعي البحر الأحمر وآمالا pic.twitter.com/vi93yqpelj
— Reflect ريفليكت (@Reflect_AR) October 19, 2021
Readers should note that the Red Sea project and the Amaala tourism initiative occupy a prime position in Saudi Arabia’s grand strategy of diversifying its economy and to eventually transition toward a green future. For the uninitiated, the Red Sea project envisages the construction of a string of hotels along with a dedicated airport, marina, and recreation centers. Similarly, six luxury hotels would be constructed under the first phase of the Amaala project.
This brings us to the crux of the topic. While the details of this envisaged battery storage system are scarce at the moment, Lucid Group currently stands out as one of the favorites to win this contract courtesy of the Saudi PIF’s majority stake in the company.
Last month, Lucid Group had highlighted the company’s overarching strategy of utilizing the depleted batteries from its EVs in its advanced battery storage systems. To wit, the battery-cell modules that power the company’s EVs are identical to the ones used in its energy storage business, thereby creating a near-perfect symmetry and compatibility between the two units. As per Lucid Group’s Chief Engineer and Senior VP of Product, Eric Bach, the company has already built a 300-kilowatt-hour prototype battery storage system in its lab. Since batteries that are considered depleted for the purposes of electric vehicles still retain about 70 percent of their original capacity, it makes economic and environmental sense to utilize such batteries in energy storage systems in order to prolong their useful lives. The company already expects its energy storage business to eventually outperform EV sales.
Bear in mind that Lucid Group’s sister company, Atieva, already has a long history of supplying battery packs to Formula E racing cars. For instance, back in 2019, Atieva’s spec battery pack powered “the entire 24-car Formula E field” for the racing season in association with its partners.
As we’ve reported previously, Lucid Group is slated to build an EV manufacturing facility in Saudi Arabia by 2024, according to the Kingdom’s Standards and Metrology Authority. Moreover, Saudi Arabia would constitute one of the first overseas markets where the Lucid Air would be retailed starting in 2022. Consequently, given the growing footprint of Lucid Group in the Kingdom, we would not be surprised should it end up as the finalist for the battery storage system contract. The only pertinent question here is how soon the company can convert its prototype energy storage systems into commercial products.
Huawei Digital Power has won the contract to provide "400 MW PV plus 1300 MWh battery energy storage solution" in relation to the Red Sea project. Lucid Group still stands a fair chance of delving into Saudi Arabia's green transition via the futuristic NEOM city project along the Red Sea coast which will be powered entirely by renewable energy.