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PIF, the Saudi Arabian sovereign wealth fund that Tesla Inc CEO Elon Musk has said could help him fund an offer to take his electric car maker private, is in talks to invest in aspiring Tesla rival Lucid Motors Inc, people familiar with the matter said on Sunday.

The talks between privately-held Lucid Motors and PIF underscore the latter’s appetite to invest in electric car makers to diversify the oil-rich Middle Eastern kingdom’s investment portfolio.

A deal with Lucid Motors would also be more in line with PIF’s limited resources, given that, despite its $250-billion in assets, PIF has already made substantial commitments to other technology companies or investments, including a $45-billion agreement to invest in a giant technology fund led by Japan’s SoftBank Group Corp.

PIF and Lucid Motors have drawn up a term sheet under which PIF could invest more than $1-billion in Lucid Motors and obtain majority ownership, the sources said. PIF’s first investment in Lucid Motors, however, would be for $500-million, and subsequent cash injections would come in two stages that are contingent on Lucid Motors hitting certain production milestones, one of the sources added.

The talks between PIF and Lucid Motors may not result in a deal, the sources cautioned.

The sources asked not to be identified because the matter is confidential. PIF and Lucid Motors did not immediately respond to requests for comment.

Based in Newark, California, Lucid Motors was founded in 2007 as Atieva by Bernard Tse, a former Tesla vice president and board member, and Sam Weng, a former exec at Oracle Corp and Redback Networks. It received backing from Chinese investors, including Jia Yueting and BAIC. Other venture capital backers have included Venrock, Mitsui & Co, Tsing Capital, Pragma Ventures, and Oriza Ventures.

Musk shocked investors this month with a tweet that he was considering taking Tesla private at a price of $420 a share, or $72-billion, and that funding was “secured.”

He elaborated last Monday that he believed Saudi Arabia’s PIF, a new shareholder in Tesla, could provide the necessary funding, although sources close to the sovereign wealth fund have played down that prospect.

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