Lucid Motors says it has "funding secured." The luxury electric-vehicle startup said on Monday that Saudi Arabia's sovereign-wealth fund has agreed to invest at least $1 billion, subject to regulatory approvals. 

This is a big deal for a couple of reasons. First, Lucid is a startup that deserves serious attention, and this should be enough money to get its first model into full production. Second, this is the same Saudi fund that Tesla (TSLA -2.03%) CEO Elon Musk was counting on to fund his now-aborted go-private effort. 

Here's what we know about Lucid and its innovative sedan, which is set to hit the market next year. 

A gray Lucid Air, a sleek and low-slung full-size sedan.

The Lucid Air is an innovative high-performance battery-electric luxury sedan that builds on lessons learned from Tesla and others. Image source: Lucid Motors.

What is Lucid Motors?

Lucid is an electric-vehicle startup led by auto-industry veterans, including several former Tesla executives. The company has shown its first model, an advanced luxury sedan called the Air, and has begun work on a factory to build it, in Arizona. 

This isn't a fly by-night effort. Lucid's chief technology officer, Peter Rawlinson, has a big credential: He was the chief engineer on Tesla's groundbreaking Model S sedan. But note that despite Rawlinson's experience with Tesla, Lucid isn't using any of Tesla's patents. 

He has assembled an impressive team of industry veterans who bring experience from Tesla and the major automakers -- and who are determined to learn from and improve on Tesla's experience in bringing premium electric vehicles to the global market.

What is this new investment?

Saudi Arabia's sovereign-wealth fund, called the Public Investment Fund, or PIF, is a $250 billion private-equity fund that's been seeking technology investments around the world. The idea is that PIF will help diversify Saudi Arabia's investments, which of course are heavily centered on oil.  

PIF has been kicking the tires of a number of electric-vehicle companies, including Tesla. When Musk tweeted on Aug. 7 that he had "funding secured" for a deal to take Tesla private, it was PIF he was counting on -- but it appears he greatly overestimated PIF's interest. 

What is the Lucid Air?

The Lucid Air, the company's first model, is a big, fast, innovative battery-electric luxury sedan. Rawlinson told me last year that its battery packs will use a new generation of lithium-ion battery cells developed by Samsung Electronics (NASDAQOTH: SSNLF) that should give it "breakthrough battery life." The Air will come standard with a 130 kWh battery pack that will give it an EPA-rated range of over 400 miles. 

Lucid expects that top-rated Airs will have even quicker acceleration than the very quick high-performance Tesla models. It's claiming a 0-to-60 miles-per-hour time of under 2.5 seconds, along with a top speed of over 200 mph. 

The Air's motors and transmission were developed in-house. Rawlinson claims the Air's motors and transmission are "smaller, more efficient, and more power-dense than competitors'." They may also be more reliable, he said -- a subtle dig at his former employer. Rawlinson was careful to speak respectfully of Tesla, but it was clear to this humble Fool that he expects the Air to outdo his former employer's vehicles on as many fronts as possible. 

A view of the Lucid Air's underpinnings, showing its battery packs and two electric motors.

The Lucid Air's drivetrain was designed in-house. It will use a new type of battery cell made by Samsung. Image source: Lucid Motors.

I sat in a prototype Air last year and was impressed. The car's interior is roomy and plush, well-trimmed with high-quality materials throughout -- again, a step ahead of Tesla's rather austere interiors. Reclining rear seats will be optional; they will offer comfort and legroom comparable to first-class airline seats. It should be quiet inside, too: There's a 29-speaker audio system that will provide active noise cancellation while the car is under way. 

Not surprisingly, given Lucid's Silicon Valley address -- it's headquartered in Newark, California -- the Air will come standard with a slew of high-tech features, including advanced driver-assist systems, and, eventually, self-driving. 

Lucid plans to offer a Level 4 self-driving system in the Air as soon as it's ready and U.S. regulators approved it. All Airs will come with the hardware needed for Level 4, including lidar sensors, much of it provided by well-respected Intel (INTC -5.16%) subsidiary Mobileye. More advanced driver-assist features, including Level 4 self-driving, will be enabled through over-the-air updates as they're ready. 

How much will the Lucid Air cost?

Lucid officials told me last year that the first Airs to be sold will be fully loaded "Launch Edition" models, priced at around $160,000. Standard models will start at around $85,000. Lucid hopes to get that base price down to $65,000 over the next few years as it and its suppliers achieve economies of scale. 

A view of the Lucid Air's back seat, with two plush-looking reclining seats trimmed in white leather.

Optional on the Lucid Air: Reclining rear seats. Image source: Lucid Motors.

When will the Lucid Air go into production?

Lucid is building a factory in Arizona, and this new investment should be more than enough to get it completed and running. Lucid expects that production of the Air will start sometime in 2019. It expects to make 10,000 Airs in the first 12 months of production and to ramp up to about 60,000 cars per year by 2022. 

Lucid is already accepting reservations for the Air; a refundable $2,500 deposit is required. 

So what does this all mean?

The Lucid Air is now very likely to come to market. If it delivers on the company's promises, and I expect that it will, the Air has the potential to set a new bar for electric-vehicle performance and luxury at a price point that's fully competitive with the big Teslas. Importantly, unlike Tesla, Lucid has no mass-market aspirations. That means it can scale production at its own pace and that it can count on luxury-car margins as long as it delivers a luxury experience. 

While Lucid's volume aspirations won't make a big dent in Tesla's sales, there's another way Lucid could turn out to be a headache for Musk and company. Assuming Lucid delivers, the Air has the potential to make the Tesla Model S look like the aging design it is. 

Tesla counts on being seen as the the most advanced automaker. If the Air upstages its perceived technological leadership, that could cost it more than just some lost sales. Stay tuned.