By Nick Carey and Aby Jose Koilparambil
(Reuters) -Aston Martin has reached a deal that will give U.S. electric vehicle (EV) maker Lucid Group a 3.7% stake in return for access to its "high performance" technology, the British company said on Monday, sending its shares up nearly 15%.
Under the agreement, Aston Martin will make cash payments and issue 28.4 million new ordinary shares to Lucid, worth together about $232 million.
The shift to electric is phenomenally costly, with carmakers globally committing around $1.2 trillion to the low-emission technology. Smaller carmakers like Aston Martin are more reliant on partnerships to make the transition.
Aston Martin plans its first EV in 2025 and until now had leant on Mercedes as its "big brother" to provide the technology it needs.
In a separate announcement on Monday, Aston Martin said it had amended an agreement with Mercedes-Benz meaning the German carmaker would not increase its stake as planned, but will maintain around 9% in Aston Martin and continue to provide it with access to engine and EV technology.
The agreement with Lucid meanwhile will give "access to Lucid's industry-leading technology for its (battery electric vehicles) BEVs, including electric powertrains and battery systems".
Aston Martin said that by 2026 all of its new models will include an electrified version and that its core range of vehicles will be fully electric by 2030.
"We now have two world-class suppliers to support... our electrification strategy," Aston Martin's executive chairman and top shareholder Lawrence Stroll said in a statement.
Last month Geely invested in Aston Martin, which Stroll said will give the British luxury carmaker access to the Chinese carmaker's technologies and components.
Lucid and Aston Martin have a common shareholder in Saudi Arabia's Public Investment Fund (PIF). The Saudi wealth fund became Aston Martin's second-largest shareholder last year.
PIF is also Lucid's main shareholder and last month provided a majority of the funds for a $3 billion stock offering by the U.S. EV maker.
Those additional funds are critical as Lucid, like its peers, struggles with mounting losses and tightening cash reserves in the face of recession fears and a price war sparked by market leader Tesla Inc (NASDAQ:TSLA).
Lucid, which makes luxury Air sedans, trimmed its 2023 production forecast last month and reported a lower-than-expected first-quarter revenue.
At 1009 GMT Aston Martin shares were up around 10%, after rising as much as 14.6% earlier in the day.