Saudi Arabia isn't exactly known for car manufacturing but that may change in the future if a new report proves accurate.

Citing people familiar with the matter, Bloomberg reported Thursday that American electric-vehicle startup Lucid Motors is in talks with Saudi Arabia's sovereign wealth fund about establishing a plant in the country.

Lucid has a plant in Casa Grande, Arizona, where production of the company's first model, the Air sedan, is scheduled to start shortly for first deliveries this spring. Lucid has also teased a second model, an SUV, based on the same platform as the Air.

Lucid is owned by Saudi Arabia's sovereign wealth fund, known as the Public Investment Fund (PIF), which bought a controlling stake in the company in 2019 for $1 billion. The PIF also owned 5% of Tesla but sold the stake in 2020.

2021 Lucid Air

According to Bloomberg's sources, the PIF only invested in Lucid on the condition the company establishes a plant in Saudi Arabia. Saudi Arabia's finances have taken a hit in recent years due to the drop in oil prices, as well as costly interventions in other countries, such as the war in Yemen. As a result, the country is looking at measures to reduce its dependence on oil.

The talks are said to be at an advanced stage, but there was no mention on when work on the plant would start.

Lucid isn't the first automaker linked with Saudi Arabia on car manufacturing. In 2012, Jaguar Land Rover conducted a feasibility study for possible production in Saudi Arabia but didn't proceed further.

As mentioned above, Lucid's Air is due to start deliveries this spring. It's priced from $77,400, though the base model isn't due to start production until 2022. The first examples to be built will be the range-topping Air Dream Edition which is priced from $169,000. That's steep but the car will come with 1,080 horsepower and 517 miles of range.