Lucid Group (LCID) shares jumped over 9% in early trading on Monday after the electric vehicle (EV) maker announced a tech partnership with Aston Martin.

In a deal worth $450 million, Lucid entered into a long-term strategic partnership to integrate and supply high-tech powertrain and battery systems to the iconic British car maker. As part of the deal, Aston Martin will give Lucid a 3.7% stake in phased cash payments in return for access to the technology.

Why Does This Deal Matter For Lucid?

This agreement is the first of its kind for Lucid, allowing it to act as a supplier a🎃nd diversify its revenue stream.

Through it, the U.S. company will power future Aston Martin battery electric vehicles while providing technical support. Along with Lucid's proprietary electric powertrain and battery technology, Aston Martin will receive its ultra-high performance twin motor drive unit and revolutionary Wunderbox.

Earlier this year, Lucid cut its workforce by 18%, as part of restructuring to cut costs, affecting 1,300 employees. The plan, which is to be completed by the end of this quarter, is expected to incur $ꦇ24-30 million in charges related to employee transition, severance payments, employee benefits, and stock-based compensation.

Lucid ended the first quarter of 2023 with over $3.4 billion in cash, cash equivalents and investments, and total liquidity of about $4.1 billion, which it expects to provide sufficient liquidity until at least the second quarter of 2024.

Lucid and Aston Martin have a common shareholder in Saudi Arabia's Public Investment Fund (PIF). PIF has invested approximately $3.6 billion in Lucid since 2018, including $915 million via a private placement in Q4 2022.