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Lucid Group has been struggling to achieve financial viability in light of its niche targeted market for luxury EVs. Even as the electric vehicle manufacturer continues to contend with economies of scale amid muted demand for its high-priced products, the company just clinched a major partnership with Aston Martin.

Lucid will supply EV powertrain components to Aston Martin and take a 3.7% stake in the company.

Aston Martin will issue about 28.4M new ordinary shares to Lucid, which will also get phased cash payments, totaling an aggregated value of ~ $232Mhttps://t.co/MkhZrtcI44 https://t.co/zprLfIHmmL

— Jaan of the EV Universe ⚡ (@TheEVuniverse) June 26, 2023

To wit, Lucid Group and Aston Martin have now entered into a $450 million long-term strategic partnership, whereby the former will supply EV powertrain and battery systems to the latter. Aston Martin will pay an access fee to Lucid Group in the form of shares (28.4 million new ordinary shares of Aston Martin) and phased cash payments. The UK-based company intends to utilize Lucid’s technology to launch a pure EV model by 2025.

While this tech-sharing agreement is a first of its kind for Lucid Group, the company does continue to face challenges. Lucid Group is targeting a full-year production of just around 10,000 units, substantially below the output of 49,000 units for FY 2023 that the company had promised during its pre-SPAC-merger phase. During the first quarter of 2023, the company produced 2,314 vehicles and managed to deliver only 1,406 units. This substantial mismatch between production and sales is a major headwind for the EV manufacturer.

The EV manufacturer ended Q1 2023 with around $4.1 billion in cash, which remains sufficient to fund its operations through the second quarter of 2024.

Back in March, Morgan Stanley had taken a relatively positive view of Lucid Group’s decision to reduce its workforce by 18 percent, corresponding to a reduction of 1,296 employees. The bank’s analyst had written in an investment note at that time:

“While we reiterate our UW rating and $5 PT, we believe the company has an attractive suite of technologies and, with the right cost management, can be a relevant player ..”

Lucid Group shares are up 10 percent in pre-market trading today. Year to date, the stock is down around 11 percent.