US electric car startup Lucid to build plant in China around 2025

Lucid Motors, an electric startup based in California, said it is planning to set up production facilities in overseas markets including China around 2025.

"Mid-decade, we plan to have plants in the Middle East and China, as well," CEO Peter Rawlinson said in an CNBC interview on Wednesday.

Rawlinson did not give details. It now has a plant in Arizona, and the startup started deliveries of its first model, the Air sedan, in September.

China is home to the world's largest auto market, and electric vehicle pioneer Tesla opened a factory in the country in 2019, which has become its major export hub globally.

NEVs are gaining in popularity in China. Sales of electric vehicles and plug-in hybrids sales rocketed 134.9 percent year-on-year in October to about 383,000 units, accounting for 16.4 percent of total vehicle deliveries in the month.

Deliveries in the first 10 months this year totaled 2.54 million, making up 12 percent of total vehicle sales in the same period. The figure was 5.8 percent in 2020.

Zhang Yongwei, a chief expert at Chinese auto think tank EV 100, said electric cars and plug-in hybrids would account for 30 percent of new vehicle sales in the country in 2025.

Lucid expects to produce 20,000 Air sedans next year, a target the company first laid out in July. Rawlinson said Lucid has "over 17,000" reservations for the model.

"They're refundable deposits, but this has grown over 30 percent just in the last six weeks since the end of Q3," Rawlinson said.

The outlook has boosted investors' confidence and pushed its market capitalization to hit $89.86 billion, surpassing that of the second largest US carmaker Ford.

Rawlinson said the company is quadrupling the size of its plant in Arizona, which now has a designed annual capacity of 34,000 vehicles.

Founded in 2007, Lucid was originally known as Atieva which made batteries for electric buses in China.

It has raised more than $100 million from several Asian investors, including Faraday Future founder Jia Yueting and BAIC Motor, according to Yicai Global.