Aston Martin Lagonda Global Holdings PLC (LSE:AML) motored after it struck a deal to buy batteries from US firm Lucid Group Inc (NASDAQ:LCID) for its electric vehicles, replacing an existing agreement with Mercedes.
Shares soared 10% after the British luxury car manufacturer said it had joined forces with Lucid to enter a supply agreement to create “industry-leading ultra-luxury high performance electric vehicles.”
The deal means Aston will switch the supplier of key electric vehicle components from Mercedes to Lucid. The UK carmaker, which already takes engines and other technology from Mercedes, had been due to issue fresh shares and make a large payment to the German car giant by the end of the year, under a deal struck between the pair in 2020.
Lucid took Tesla's crown as the maker of the electric car with the longest range in 2021, with a version of its Lucid Air Dream Edition vehicle notching up 520 miles on a single charge, though Mercedes-Benz later unveiled a prototype with an even longer range.
Lawrence Stroll, executive chairman of Aston Martin, said: "The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin."
The agreement gives Aston access to Lucid's technologies while Lucid will supply Aston with select powertrain components for initial and future battery-electric vehicle (BEV) models.
As part of the agreement, US-based luxury EV maker Lucid will supply Aston Martin with powertrain components for initial and certain future BEV models.
Aston will issue 28.4mln shares to Lucid and make cash payments of around £182mln. Lucid will hold a 3.7% stake in Aston.
Other major shareholders in Aston, including Yew Tree Consortium, Mercedes-Benz and Geely have backed the deal.
The DB7 maker also rejigged an existing deal with Mercedes-Benz AG.
The amended terms will see the original agreement to issue additional Aston Martin shares to Mercedes-Benz in exchange for access to further technology replaced with a restated commitment to the existing strategic collaboration allowing the two parties to discuss future access to technology for cash.
Lucid, which earlier this year reported struggles with demand as it struggled to match price cuts by rival Tesla, is currently making over 2,314 vehicles each quarter at its facility in Arizona, USA. It more recently raised US$3bn from an affiliate of Saudi Arabia’s Public Investment Fund.