PIF, the Saudi Arabian sovereign wealth fund which Tesla CEO Elon Musk has said could help him fund a US$72bn deal to take his electric car maker private, is in talks to invest in aspiring Tesla rival Lucid Motors, Reuters sources have said.

Reuters said the talks between privately-held Lucid Motors and PIF illustrated the latter's willingness to invest in electric car makers to diversify the oil-rich Middle Eastern kingdom's investment portfolio and would also be more in line with PIF's limited resources, given that, despite its US$250bn in assets, it has already made substantial commitments to other technology companies or investments.

The news agency's sources said PIF and Lucid Motors had drawn up a term sheet under which PIF could invest more than $1bn in Lucid Motors and obtain majority ownership though the first investment would be for $500m with subsequent cash injections to come in two stages contingent on the EV maker hitting certain production milestones.

The talks between PIF and Lucid Motors may not result in a deal, the sources reportedly cautioned.

Reuters noted that Newark, California-based Lucid Motors was founded in 2007 as Atieva by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former executive at Oracle and Redback Networks. It received backing from Chinese investors, including tech entrepreneur Jia Yueting and state-owned automaker BAIC.

It is not yet selling any cars but, in 2016, unveiled a prototype of its Lucid Air model, a $100,000 luxury sedan it had hoped to begin building in Arizona in late 2018. It was not clear when this car would become available, though the company is accepting refundable deposits of $2,500 from consumers on its website, the report added.

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