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Tesla rival Lucid Motors plans Casa Grande plant

Ronald J. Hansen and Yvonne Wingett Sanchez, The Republic | azcentral.com
An all-electric prototype car from Lucid Motors is shown during a 2016 press conference announcing that the company will open a manufacturing plant near Casa Grande.

A startup company aiming to compete with electric-vehicle maker Tesla announced plans Tuesday for an assembly plant in Casa Grande that could bring up to 2,000 jobs over five years.

Lucid Motors of Menlo Park, Calif., plans to start constructing the $700 million plant in the second quarter of 2017. Company officials said the facility could begin producing electric luxury sedans by the end of 2018. Parts for the vehicles would be manufactured by suppliers in Sonora, Mexico.

Arizona helped secure its piece of the ambitious, transnational effort in part by offering more than $46 million in subsidies tied to milestones the company must reach as it moves toward vehicle production. 

Gov. Doug Ducey announced the company's plans at a news conference at the state Capitol, joined by Sonora Gov. Claudia Pavlovich and Lucid executives. Two early prototypes of the sedans Lucid plans to assemble in Arizona provided a backdrop for the event.

Arizona Gov. Doug Ducey shakes hands with the governor of Sonora, Mexico, Claudia Pavlovich Arellano, at the Arizona state Capitol in Phoenix on Nov. 29, 2016. Parts for Lucid Motors' electric vehicles would be manufactured by suppliers in Sonora.

Ducey noted the company expects to begin hiring next year and the plant could create more than 2,000 jobs by 2022. 

“We’ve demonstrated that Arizona is among the most competitive states in the nation to work and do business — we’re talking technology companies, we’re in Silicon Valley. We’re talking with organizations considering Arizona over other states," Ducey said.

He noted the company scouted 13 other states before settling on Arizona. “The word’s out on us,” Ducey said.

If Arizona's profile is known, Lucid's is less so.

One of its financial backers is reportedly Jia Yueting, a Chinese billionaire whose fortunes have soured in recent months, raising questions about at least some of the support Lucid may have expected. 

Yueting is involved with another electric car plant in Nevada. That state's treasurer reportedly told Chinese media recently that, "Jia doesn’t have any money.”

For his part, Brian Barron, director of manufacturing for Lucid, said the company has several investors. 

"There is no majority ownership in our company. We're a U.S. company and we plan to keep it like that. As far as money, it's no secret it takes a lot of money to start up an automotive (company) but we have funding. We do plan other fundraising rounds and all of that is part of our financial model," he said.

Arizona Electric car owners hope to jolt interest in vehicles

In 2014, the company, then known as Atieva Inc., made an equity offering. According to a Securities and Exchange Commission filing, the company offered nearly $200 million in equity shares, but only sold about $100 million. 

Casa Grande Mayor Bob Jackson touted the Lucid project as another sign of that city's viability as a "promising area" for technology and innovation.

"For the past five years, Casa Grande has worked diligently to attract companies that could serve as economic drivers for our entire region," Jackson said.

He also mentioned the PhoenixMart project, a planned global wholesale-trade center, in his city that broke ground in November 2013 with promised backing from foreign investors. That was supposed to open as early as 2014, but federal officials raided the site a year ago and the project remains under construction.

Arizona's 'recipe': Low taxes, high quality of life

Peter Rawlinson, Lucid's chief technology officer, said in a written statement: “Lucid Motors is building the luxury automobile of the future, and we have an opportunity to become the global leader in automotive technology. We are confident Arizona is the ideal location to advance our innovations and will continue to provide an excellent platform for our success.”

While the state apparently succeeded in luring Lucid, it fumbled details of the subsidies during the news conference Tuesday.

Ducey sidestepped at least three direct questions about the potential cost to taxpayers. Instead, he directed the questions to Sandra Watson, president and CEO of the Arizona Commerce Authority.

Watson said the state used two existing performance-based programs to woo the company. In fact, it used three. She said Tuesday the value of tax credits the company could receive was unknown. On Wednesday, the authority noted "there seems to be some confusion" over the value of the subsidies. 

“As the jobs are developed and as the investments are made, that’s when our incentives will kick in,” Watson said Tuesday. "It's a combination of investment and the number of jobs so at this point it's difficult to calculate," she said of the facilities credits. 

The company could receive up to $5 million from the Arizona Competes Fund. It also could be eligible for up to $40 million in tax credits if its facilities meet certain criteria and $1.5 million for job training grants tied to its hiring.

Susan Marie, a spokeswoman for the authority defended the subsidies Wednesday, comparing Lucid's deal to a pair of high-profile deals in Nevada.

"It’s worth noting that if Lucid Motors received every dollar from each of the above mentioned programs, the total state level package would be worth $46.5 million, which pales in comparison to the $1.3 billion package for Tesla and the $335 million package for Faraday Future that Nevada did," she said in a statement.

A spokesman for the Pinal County supervisors could not be reached for comment about its commitments to Lucid.

Ducey said Arizona’s “recipe” of low taxes, light regulation, “a good education system,” and lifestyle make it attractive for companies to relocate or start operations in the state. And, he said, as a former CEO himself, he’s helping negotiate the deals. 

“I’m at the table, I’m making the case for the state, and I’m also doing my best to close these deals,” he said, moments before he posed for photos with the luxury cars.

Arizona lags in high-paying 'advanced industry' jobs

State's job growth unspectacular

The announcement comes as Arizona continues to see decent but unspectacular job growth.

In October, the state had added nearly 50,000 jobs over the past 12 months. That equates to 1.9 percent growth in that time, which ranked 18th in the nation, according to an analysis of federal job figures by the JPMorgan Chase Economic Outlook Center at Arizona State University’s W.P. Carey School of Business.

Seven other Western states posted faster growth rates than Arizona in that span. The nation as a whole grew 1.6 percent over the past 12 months.

Arizona’s growth has spread to metro Tucson, which has rivaled the Phoenix area’s growth rate in recent months. Still, outside the state’s two largest population centers, job growth is scarce. That makes the Lucid project especially valuable if it comes to pass.

Phoenix also ranks 18th in job growth among the nation’s metro areas with at least 1 million residents. Places like Orlando, Seattle and Denver top the list. But even areas like St. Louis, Detroit and Cincinnati have outpaced Phoenix in the past 12 months.

Ryan Randazzo and Mary Jo Pitzl contributed to this report.