Aston Martin Strikes Battery Deal with EV Startup Lucid

(Photo Credit: Thibaut Nagorny/Unsplash)
(Photo Credit: Thibaut Nagorny/Unsplash)

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Who needs classic German engineering when you can have Silicon Valley startup swagger?

On Monday, Aston Martin and California EV-maker Lucid announced they’d inked a deal for Lucid to supply James Bond’s favorite car brand with battery technology for Aston Martin’s future EV models, which are scheduled to make their debut in 2026. The deal supplants an agreement Aston Martin struck with Mercedes three years ago, and shows how even legacy automakers are getting creative in the face of an ever-turbulent EV market.

Rough Ride

Aston Martin has faced a bumpy road over the past few years. The 110-year-old brand went public in 2018, but the IPO sputtered and in 2022 it doubled its losses while selling just 6,400 cars. The one bright spot was four models making an appearance in 2021’s No Time to Die. Aston Martin agreed in 2020 to buy EV and battery technology from Mercedes, itself a shareholder in the iconic British brand. The new deal with Lucid means Aston Martin is off the hook for a large payment to Mercedes and new issuance of shares that would have been due this year. Lucid has also faced difficulties recently: demand for its EV seemed to taper off alarmingly in February, and in March the company slashed 18% of its workforce.

Although neither Aston Martin nor Lucid are exactly the faces of democratizing EVs, Professor Peter Wells, director of the Centre for Automotive Industry Research at Cardiff University, told The Daily Upside the deal was symptomatic of the wider industry:

  • “It has proven difficult for both established and new entrant players to create a stable and profitable business model amid high rates of experimentation,” Wells said.
  • Wells added that if Aston Martin had stuck to using Mercedes for batteries, it might have lost some branding edge: “the industry has always had to balance economies of scale against brand differentiation. Only this time, the massively complicating factors are the cost and uncertainty involved in the transition to electric.

For Lucid, the deal means diversifying away from being just an automaker, but a supplier, too. It’s not the only EV maker to start stashing eggs in different baskets, with Tesla quickly leveraging its previously exclusive charging network.

Playing Both Sides: Lucid is majority-owned by the Saudi Arabia sovereign wealth fund, a.k.a. the Public Investment Fund (PIF), which just so happens to be Aston Martin’s second-largest shareholder with an almost 17% stake. The irony of an oil-rich nation funding both sides of an EV deal is not lost on us.