Lucid Motors is turning its Saudi Arabian factory into a strategic workaround for rising electric vehicle tariffs, shifting key production away from China just as trade barriers harden. By anchoring its midsize EV program in the kingdom, the Luxury EV maker is betting that geography and geopolitics can be as important as battery chemistry in determining who wins the next phase of the global car race.
The move is more than a clever customs play. It plugs Lucid directly into Saudi Arabia’s industrial ambitions, deepens its reliance on the kingdom’s capital, and tests whether a premium American brand can scale profitably from a new Manufacturing Hub in the Middle East while navigating pressure from Washington and Beijing.
Lucid’s Saudi pivot and the tariff squeeze on China
Lucid Motors is repositioning its global footprint around Saudi Arabia at the exact moment tariffs on Chinese-made EVs are becoming a defining cost factor for the industry. Chief Financial Officer Taoufiq Boussaid has been explicit that the company’s plan is to use production in the kingdom to sidestep the steep duties that apply when vehicles or components are sourced directly from China, especially for its upcoming midsize lineup. In his telling, the Saudi strategy is not a side project but a core answer to how Lucid intends to sell competitively priced cars into markets that are tightening the screws on Chinese supply chains.
The company’s leadership has framed this as a deliberate response to a policy environment in which the United States briefly raised tariffs on Chinese EVs and related components earlier this year, signaling that trade barriers could become a semi-permanent feature of the market rather than a passing skirmish. By shifting assembly and sourcing to Saudi Arabia, Chief Financial Officer Taoufiq Boussaid argued that Lucid can position its midsize EVs to avoid the most punitive charges that hit China-linked imports, a point he underscored when he said Wednesday the Saudi production strategy allows the company to bypass those US tariffs on China in a more durable way, as detailed in his comments on Saudi production of midsize EV.
Inside the Saudi Manufacturing Hub
Lucid’s tariff strategy only works if its Saudi facility can operate as a true Manufacturing Hub rather than a symbolic outpost, and the company has started to show that this plant is gaining real scale. Since production began in the kingdom, Lucid has reached 1,000 EVs assembled at its Saudi plant, a milestone that signals the site is moving beyond pilot runs and into meaningful output. That volume is modest compared with established factories in North America or Europe, but it is enough to validate the basic logistics of shipping parts, training workers, and integrating the site into Lucid’s global supply chain.
Boussaid has described how manufacturing in Saudi Arabia allows Lucid to source components from a broader mix of suppliers and then complete final assembly in the kingdom, which is crucial to qualifying vehicles under trade rules that look at where value is added rather than where every part originates. The company’s own description of the facility emphasizes that this Manufacturing Hub in Saudi Arabia is designed to support the long term growth of the electric vehicle maker, a role highlighted in reporting on how Lucid reached 1,000 EVs assembled at the site since production started, as detailed in coverage of its Saudi plant milestone.
How Lucid’s CFO frames the tariff workaround
Chief Financial Officer Taoufiq Boussaid has become the public architect of Lucid’s tariff navigation plan, and his language reveals how tightly the company is tying its future to Saudi Arabia. He has explained that by building midsize EVs in the kingdom, Lucid can effectively reclassify those vehicles for trade purposes, so they are treated as Saudi products rather than Chinese-linked imports when they enter markets that have imposed higher duties on China. In his view, this is not a loophole but a legitimate use of international trade rules that reward companies for investing in local production and jobs.
Boussaid’s comments also make clear that Lucid sees this approach as a hedge against policy volatility in Washington, where tariff levels on Chinese EVs have already shifted once and could change again. He has pointed to the episode when the United States briefly raised tariffs on Chinese electric vehicles and components as a warning sign that relying on China-centric supply chains could expose Lucid to sudden cost spikes. By contrast, he argues that Wednesday the Saudi production strategy gives Lucid a more predictable cost base and a clearer path to selling midsize EVs at scale, a rationale he laid out in detail in his remarks on turning to Saudi Arabia to avoid US tariffs.
Saudi Arabia’s rise as an automotive production hotspot
Lucid’s decision to anchor so much of its future in Saudi Arabia only makes sense in the context of the kingdom’s broader push to become a regional carmaking powerhouse. Saudi officials have been courting global automakers with a mix of subsidies, infrastructure promises, and regulatory support, pitching the country as a bridge between Europe, Asia, and Africa. The goal is to turn the kingdom into a first “production base” in the Middle East and to lay the foundation for becoming a leading automotive manufacturing hub in the region, a strategy that aligns neatly with Lucid’s need for a politically neutral, tariff-friendly location.
That ambition is not limited to one company. Saudi Arabia is emerging as a new automotive production hotspot, with multiple brands planning factories that will serve both domestic buyers and export markets. The kingdom’s pitch emphasizes logistics corridors, access to energy, and a regulatory environment that can be tailored to the needs of advanced manufacturing, including EVs and their supply chains. Reporting on how it will become the company’s first “production base” in the Middle East and how this lays the “foundation for becoming a leading automotive manufacturing” center underscores how the country is positioning itself as a regional anchor for car production, as seen in analysis of Saudi Arabia’s role as a new automotive production hotspot in the Middle East and beyond.
The Public Investment Fund’s grip on Lucid
Lucid’s Saudi production strategy is inseparable from its financial dependence on the kingdom’s sovereign wealth. Saudi Arabia’s Public Investment Fund is not just a friendly investor, it is the controlling shareholder that has kept Lucid afloat through heavy cash burn and ambitious expansion plans. Both Lucid and Uber share a powerful common investor in Saudi Arabia’s Public Investment Fund, and in Lucid’s case The PIF owns 60% of the company, a level of control that gives Riyadh enormous influence over where factories are built and how capital is deployed.
That 60% stake means strategic decisions like building a Manufacturing Hub in Saudi Arabia are not simply operational choices, they are also political and financial alignments with the priorities of the Public Investment Fund. The PIF has made clear that it wants to use its capital to diversify Saudi Arabia’s economy away from oil and into sectors like electric mobility, autonomous driving, and software. Analysis of how Both Lucid and Uber are tied to Saudi Arabia through the Public Investment Fund, and how The PIF owns 60% of Lucid with a market cap of ~$7.36 billion, highlights just how central the fund is to Lucid’s survival and strategic direction, as detailed in reporting on how Lucid needs cash and leans on Saudi backing.
From luxury flagship to midsize volume play
Lucid built its brand on high-end models that positioned the company as a Luxury EV maker, but the Saudi production shift is tied to a more mass-market ambition. The midsize EV program that Chief Financial Officer Taoufiq Boussaid has linked to the Saudi plant is aimed at reaching buyers who cannot or will not pay six-figure prices for a premium sedan. To make that math work, Lucid needs lower production costs, more flexible sourcing, and protection from tariffs that could wipe out already thin margins on a smaller, cheaper vehicle.
That is where the Saudi strategy becomes central to Lucid’s growth story. By using the kingdom as a base for midsize EV production, the company hopes to unlock a much larger addressable market without sacrificing the performance and design cues that define its Luxury EV identity. Reporting on how Lucid Motors is turning to Saudi Arabia to avoid US tariffs makes clear that the tariff angle is directly connected to this midsize push, with Boussaid explaining that the Saudi plant is being positioned to support the next wave of models that must compete on price as well as technology, a link that is central to the company’s plan to scale beyond its initial flagship lineup, as described in coverage of the bold Saudi strategy that aims to unlock massive growth.
Saudi strategy as growth engine, not just tariff shield
Lucid’s leadership has been careful to present the Saudi pivot as more than a defensive maneuver against tariffs, casting it instead as a growth engine that can reshape the company’s global footprint. The narrative is that by embedding itself in Saudi Arabia’s industrial plans, Lucid gains access to capital, infrastructure, and political support that would be hard to match in more mature markets. That support can translate into faster factory buildouts, smoother permitting, and a more coordinated push into export markets across the Middle East, Europe, and Africa.
In that framing, the ability to dodge US tariffs on China is a powerful but secondary benefit of a broader partnership that positions Lucid as a flagship of Saudi Arabia’s economic diversification. Analysis of Lucid Motors Unlocks Massive Growth With Bold Saudi Strategy 2025 underscores how the company’s decision to utilize Saudi Arabia as a key production base is seen as a way to accelerate expansion and reshape the broader EV landscape, not just to solve a near term trade problem. The description of how Lucid Motors is known for crafting some of the most advanced electric vehicles and is now tying that reputation to a bold Saudi strategy reinforces the idea that the kingdom is central to its long term growth narrative, as explored in coverage of its Saudi growth strategy.
Risks, rewards, and what comes next
For all its logic, Lucid’s Saudi-centric plan carries real risks that go beyond the usual execution challenges of ramping a new factory. The company is tying its fate to a single dominant shareholder, The PIF, and to a country whose geopolitical relationships can shift quickly, especially as tensions between the United States, China, and Middle Eastern powers evolve. If trade rules change again or if political pressure mounts on companies seen as too close to Saudi Arabia, Lucid could find that the same strategy that once offered tariff relief becomes a new source of scrutiny.
At the same time, the rewards are hard to ignore for a company that still needs large amounts of capital and a clear path to scale. By using Saudi Arabia as a Manufacturing Hub, leaning on the Public Investment Fund’s 60% ownership, and aligning with the kingdom’s ambition to become a leading automotive production hotspot in the Middle East and beyond, Lucid has crafted a plan that could turn a geopolitical challenge into a competitive edge. Whether that edge holds will depend on how quickly the Saudi plant can move from 1,000 assembled EVs to true mass production, and on whether the tariff walls around China stay high enough, for long enough, to make this bet pay off.
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