Aston Martin Lagonda Global Holdings PLC on Monday said it has entered integration and supply agreements with the US’s Lucid Group Inc to create ‘industry-leading’ battery electric vehicles.

The Gaydon, England-based luxury car manufacturer also has amended its existing co-operation agreement with Germany’s Mercedes-Benz Group AG.

Under the new strategic integration and supply agreements, Aston Martin will gain access to Lucid’s battery electric vehicle technology, including battery systems and select electric powertrain components.

Aston Martin said it will pay Lucid a total of $232 million under the deal. This includes an aggregate $132 million in cash, with an initial $33 million payment and subsequent amounts payable over multiple dates in 2025 and 2026. Aston Martin also will grant Lucid 28.4 million new Aston Martin shares, worth about $100 million, making Lucid a 3.7% shareholder in the company.

Lucid, a Silicon Valley-based electric vehicle maker, on Monday said the contracts with Aston Martin under the new partnership are worth in excess of $450 million.

Aston Martin noted that existing major investor Public Investment Fund, the sovereign wealth fund of Saudi Arabia, also is the controlling shareholder in Lucid. As such, PIF cannot vote on Aston Martin’s resolution approving the agreement. PIF has a 18.7% in Aston Marton.

Excluding PIF, Aston Martin said that 58.5% of the votes in respect of the resolution are secured. These include irrevocable votes in favour from Yew Tree Consortium, Mercedes-Benz, Geely Group Ltd and Geely International Ltd, which together own 48.1% of Aston Martin’s equity.

Aston Martin said the agreement will support its electrification strategy and long-term growth, including its target to launch its first BEV in 2025.

In line with efforts to develop alternatives to the internal combustion engine, Aston Martin said its first plug-in hybrid ‘supercar’ Valhalla will commence delivery in 2024. It said all new product lines will have an electrified powertrain option by 2026, and intends its core portfolio of sports, GT and SUV models to be fully electrified by 2030.

‘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,’ said Executive Chair Lawrence Stroll.

Aston Martin also has updated its long-term strategic co-operation agreement with Mercedes-Benz. The two companies originally entered the agreement in late October 2020, and it has allowed Aston Martin access to a wide range of Mercedes-Benz’s technology. In exchange, Aston Martin agreed to issue shares to Mercedes-Benz in at least two tranches by July 2024.

The original agreement now has been replaced with a restated commitment to the existing strategic collaboration, allowing Aston Martin and Mercedes-Benz to discuss future access to technology in exchange for cash. Aston Martin will not issue or pay any further consideration shares or related cash top-ups to Mercedes-Benz.

Aston Martin said Mercedes-Benz will remain a long-term strategic partner and 9.4% shareholder. Under the companies’ ongoing relationship agreement, it also will retain its current representation on Aston Martin’s board through Non-Executive Director Franz Reiner.

Aston Martin also said Mercedes-Benz has waived any rights or obligations under the strategic co-operation agreement, that may otherwise have arisen regarding the agreements with Lucid.

‘Today’s revised cooperation agreement is the best of both worlds,’ Reiner commented. ‘It ensures that Aston Martin continues to have access to a wide range of Mercedes-Benz technologies, while at the same time giving the iconic British carmaker the opportunity to explore new opportunities which fit its specific needs.’

Shares in Aston Martin were up 7.2% at 350.80 pence in London on Monday.

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