Lucid Group Inc. witnessed a significant rebound in its stock on Monday, recovering from the previous session’s record closing low, following the announcement of a supply agreement with luxury automaker Aston Martin Lagonda Global Holdings PLC, based in the UK.
Under the terms of the agreement, Aston Martin will make a technology access payment of $232 million to Lucid, comprising $100 million in shares of Aston Martin and $132 million in cash payments spread over a three-year period. Additionally, Aston Martin has committed to a minimum expenditure of $225 million on Lucid powertrain components.
In exchange, Lucid will grant Aston Martin access to its powertrain and battery-system technologies, integrating Lucid’s powertrain and battery components with Aston Martin’s battery electric vehicle (BEV) chassis.
The positive news resulted in a 12.7% surge in Lucid’s stock during morning trading on Monday, marking a recovery from a five-day losing streak that had caused the stock to close at a record low of $5.47 on Friday.
Aston Martin’s shares listed in the UK also experienced an 11.1% increase, reaching a 14-month high, while its US-listed shares climbed 12.1%.
The long-term partnership between the two companies is subject to approval by Aston Martin shareholders and other conditions. If the conditions are met or waived by December 31,/2023, the agreement will remain in effect. However, termination of the agreement is also possible under certain circumstances.
Over the past three months, Lucid’s stock has declined by 24.7%, while the Global X Autonomous and Electric Vehicles exchange-traded fund has rallied 11.7% and the S&P 500 has gained 9.7%. Aston Martin’s shares listed in the UK have seen a significant 70.8% increase over the same period.
