Aston Martin Lagonda’s (AML) rally extended to hit highs not seen since February 2022 after inking a technology supply deal with US-based luxury electric vehicles designer Lucid (LCID:NASDAQ).

Aston Martin and Lucid have agreed integration and supply agreements that will provide Aston Martin with access to Lucid’s technology for its battery electric vehicle, including electric powertrains and battery systems. As part of the agreement, Lucid will become a 3.7% shareholder in Aston Martin and also receive $132 million in cash from the British firm.

Lucid's Air Grand Tour luxury EV

‘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 [battery electric vehicle] products,’ said Aston Martin’s executive chairman Lawrence Stroll.

MERCEDES-BENZ EXPERTISE

Aston Martin also separately agreed to continue its cooperation with Germany’s Mercedes-Benz (MBG:ETR). 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.

The news of both agreements went down well with investors who have been increasingly optimistic over Aston Martin’s prospects. Rallying around 12% on 26 June, the stock is now trading at 365p, its highest is more than 15-months.

 

 

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