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Aston Martin partners with California-based Lucid to produce electric vehicles.

Aston Martin, a British manufacturer of ultra-luxury sports cars, has partnered with Lucid Group, an electric luxury car company based in California. Under the terms of the agreement, Lucid will supply electric motors and battery systems for use in Aston Martin’s planned electrified vehicles.

The first all-electric Aston Martin will roll off the assembly line in 2025, the company said last year. Lucid’s top shareholder is the Saudi Arabian Public Investment Fund, and Aston Martin’s greatest shareholder is billionaire chairman Lawrence Stroll. Geely, a Chinese automaker that also owns Volvo and Lotus, raised its stake in Aston Martin to approximately 17% last month. As part of the recently announced deal, Lucid will acquire a 3.7% share in Aston Martin.

In a Monday press release, Lucid said that Aston Martin had chosen it “through a competitive process.” Lucid estimates that the overall value of the contracts with Aston Martin to be around $450 million. Using Lucid’s parts, Aston Martin will create its own electric vehicle technology.

Several parts used in British Motor Corporation’s gas-powered and electric vehicles are supplied by Mercedes-Benz under existing agreements.

The automaker Aston Martin is unusual in that it operates largely independently from rival companies. The Volkswagen Group, which owns Bentley, and the BMW Group, which owns Rolls-Royce, are two of its main competitors. These labels have access to the resources and innovations of their parent corporations. The agreements Aston Martin has made with other car companies give it access to the same sort of shared technology that its rivals enjoy.

The Lucid Air, a $90,000 entry-level electric luxury vehicle that has received multiple honors, including MotorTrend Car of the Year in 2021, is a multiple award winner. Executives have stated that the company’s sales difficulties are the result of “macroeconomic conditions.” Earnings for the third quarter were significantly lower than expected, and the business reduced its output predictions.

Despite Aston Martin’s claims of good sales, especially of its DBX SUV model, the company has been losing money as it invests in the development of future models. Over the next five years, Aston Martin aims to invest over £2 billion, or roughly $2.5 billion, as the company shifts to delivering electric and plug-in hybrid cars.

By Monday midday, Aston Martin stock had risen by nearly 11% due to the deal’s positive reception. The share price of Lucid also increased by roughly 7%.

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