The Aston Martin Lagonda Global Holdings PLC (LON: AML) share price surged 14.1% after unveiling a new strategic supply agreement with Lucid Group, the EV manufacturer, to supply specific powertrain components for initial and future BEV models.
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Under the agreement, Aston Martin agreed to issue 28,352,273 new ordinary shares to Lucid Motors and make phased cash payments to Lucid. The shares issued were worth $100 million (£79 million), with the remaining cash payments worth about $132 million (£104 million).
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Lucid Group agreed to give Aston Martin access to its advanced technologies and expertise in luxury electric vehicles, which the latter shall utilise to create iconic EV models embodying its ultra-luxury craftsmanship and high-performance in-house engineering excellence.
The agreement comes at the perfect time as Aston Martin embarks on creating a bespoke single BEV platform that it will use to create all future BEV models. The bespoke platform shall utilise the powertrain components supplied by Lucid for future BEVs.
Aston Martin will have to seek shareholder approval of the deal but has already received commitments from the Yew Tree Consortium, which owns 21.1% of its shares, Geely International, which owns 17.6%, and Mercedes-Benz AG, which owns 9.4% of its outstanding shares.
The company also announced an update to its partnership with Mercedes-Benz AG to eliminate future share-based compensation in exchange for the technology supplied to Aston Martin by Mercedes. Therefore, future payments shall be made in cash instead of shares.
Lawrence Stroll, Aston Martin’s Executive Chairman, said: “The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin. Based on our strategy and requirements, we selected Lucid, gaining access to the industry's highest performance and most innovative technologies for our future BEV products.”
Peter Rawlinson, CEO of Lucid Group, said: “This partnership will represent a landmark collaboration between Aston Martin, a storied marque with a rich history, including winning at Le Mans and its current successes in F1, and the very best of Silicon Valley innovation and technology from Lucid.”
*This is not investment advice.
The Aston Martin (AML) share price.
The Aston Martin share price surged 14.09% to trade at 372.50p, from Friday’s closing price of 326.50p.
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