How Lucid Plans To Dodge U.S. Tariffs For Its Midsize Electric SUV

Lucid plans to manufacture its midsize electric SUV in Saudi Arabia to avoid U.S. tariffs on Chinese components. This strategic move aims to keep costs low and make the SUV more accessible, priced around $50,000. The production in Saudi Arabia allows Lucid to import parts from China without incurring significant duties, providing a competitive edge over U.S.-made rivals like Tesla Model Y and Rivian R2.

Lucid will face a make-or-break moment with the launch of its midsize electric SUV next year.
The Air sedan and Gravity SUV are luxury models out of reach for most buyers. The midsize SUV will aim to change that.
It will be made at Lucid's upcoming plant in Saudi Arabia, which ironically would protect it from heavy tariffs.

Lucid’s upcoming midsize electric SUV might have a small edge over its U.S.-made rivals. The Tesla Model Y and Rivian R2 competitor, expected to be named the Lucid Earth, will be made in Saudi Arabia, a move that could help the automaker sidestep U.S. tariffs linked to Chinese components.

Speaking at the UBS Global Industrials and Transportation Conference on Wednesday, Lucid’s Chief Financial Officer, Taoufiq Boussaid, elaborated on how production in Saudi Arabia could protect the electric SUV from tariffs.

“We found ourselves in a fortunate space having the option to manufacture the car in [Saudi Arabia],” Boussaid said. “What it does is it allows us basically to import from China part of the bill of materials without having to incur the significant duty,” he added.

2026 Lucid Gravity Grand Touring

Photo by: Suvrat Kothari

Last year, the Biden administration announced 100% tariffs on vehicle imports from China, effectively prohibiting them from entering the country to protect America’s domestic auto industry.

The Trump administration imposed another 25% tariffs on imported vehicles and auto parts, with some exceptions granted to vehicles made in Mexico and Canada. Saudi Arabia, by contrast, falls under the group of countries which have a less punitive 10% tariff rate.

Boussaid added that Lucid will source the high-voltage battery pack, the most expensive component of an EV, from China alongside several other unspecified equipment. “Given the timeframe that we have to get this car ready we find ourselves in a very comfortable spot being able to import this bill of materials,” he added.

2026 Lucid Air

Photo by: Lucid Motors

Those savings could be central to Lucid’s plan to launch the midsize SUV at roughly $50,000, which Boussaid described as the “heart of the market.” If it delivers, the company’s third model would land at a far more accessible price point than the Air and the Gravity, which start at $71,000 and nearly $80,000 before destination.

In addition to the electric SUV, Lucid has also confirmed that the midsize platform will spawn two other EVs in the similar price range, but details on those are limited at the moment.

Now the stakes are arguably even higher than they were with the Gravity. Supply-chain snags and a magnet shortage delayed Gravity production, and the flagship SUV stumbled out of the gate with faulty digital keys and buggy software. Fixing those issues is crucial before Lucid attempts a mass-market entry.

“We need to get it right the first time,” Boussaid said, referring to the midsize platform. “That’s what our engineering organization has been doing relentlessly, combining learnings from all those years, making the best product right the first time without the need to constantly iterate,” he added.

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