US electric car company Lucid Motors is in investment talks with Saudi Arabia's sovereign wealth fund, the PIF, Reuters has reported.

The two parties have drafted a non-binding agreement under which PIF would make a $1 billion (£783m / Rs 6,955 crore) investment and assume majority ownership.

The initial investment would be of $500m (£391m / Rs3,477 crore), with subsequent funding coming as Lucid achieves production milestones.

In 2016, the company stated its ambition to begin production of its first model, the Air, this year at a new, $700m (Rs 4,867 crore) facility in Casa Grande, Arizona. However, it has since pushed that goal back to 2020 while it raises the necessary funds.

The Air, which exists in prototype form, is a sporting luxury saloon that is claimed to offer a 400-mile driving range, up to 1000bhp and a 0-60mph time of 2.5sec. The proposed price range is $60,000 to $100,000 (approximately £47,000 / Rs 41 lakh to £78,000 / Rs 69 lakh).

The Saudi Arabian fund is said to have reserves of around $250bn (Rs 17 lakh crore) and has been investing heavily in order to diversify the country's portfolio away from oil. For example, it has sunk $45bn (Rs 312,997 crore) into a multinational technology group, including Apple and Qualcomm, that will focus on artificial intelligence and robotics. 

However, Reuters' sources cautioned that the deal with Lucid isn't certain to proceed. The PIF has also reportedly been in talks to increase its 5 percent share in Tesla, as alluded to by CEO Elon Musk's controversial statement that "funding is secured" to take his company private at $420 per share.

It would cost $72bn (Rs 500,868) to return Tesla to private ownership, Reuters claimed.

Lucid was formed in 2007 under the name Atieva by Bernard Tse, a former board member and vice president of Tesla, and engineer Sam Weng. Its chief technology officer is Peter Rawlinson, a former head engineer at Jaguar, Lotus and Tesla.

Tse left in 2015 as a result of friction with Chinese state-owned BAIC, which had a 25 percent stake. This was sold to an anonymous investor in 2016.

Lucid's other connections include a battery supply deal with Samsung and development of technology for the next-generation Formula E car along with McLaren and Sony.