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Lucid is among a wave of electric-vehicle startups getting closer to releasing their first models, looking to challenge traditional auto makers like General Motors Co. and Volkswagen AG that are investing billions in the technology and Tesla Inc., a company that continues to dominate the scene for high-price battery-powered cars.

Backed by Saudi Arabias sovereign-wealth fund, Lucid is taking aim at the luxury end of the market with the Air, hoping to not only carve into Teslas market share but also attract more conventional sedan buyers from BMW AG, Daimler AG s Mercedes-Benz and other premium brands, its executives say.

Chief Executive Peter Rawlinson said that based on the companys own testing, the priciest Air is expected to deliver a battery range of more than 500 miles, a distance that would beat current competitors, including the longest-range version of the Tesla Model S. The Environmental Protection Agency hasnt certified that range yet.

The first, fully loaded four-door Air will start around $160,000 after factoring in federal subsidies. The company will release cheaper versions throughout the year with a roughly $70,000 version coming in 2022.

Like Tesla, Lucid plans to sell its models directly to customers, bypassing the traditional dealership network, and expects to open a new retail and service location in Beverly Hills, Calif. later this month.

Mr. Rawlinson said that while there have been pricier electric models released in recent years, Tesla still holds a commanding lead and there is room for more competition.

We see just how far ahead Tesla is, he said. They are five years or more ahead of everyone else, and the shock is the gap is not being closed. The gap is growing as we speak.

The Lucid Air makes its debut as tougher auto-emissions regulations are pushing car makers to add more battery-powered models to their lineups, and investors, excited by Teslas recent stock market success, are pouring money into the technology. Teslas market value has nearly quadrupled this year, making it the worlds most valuable auto maker ahead of GM, Toyota Motor Corp. and Volkswagen.

The Air also arrives as the marketplace for electric cars is expected to become increasingly crowded in the coming years, with dozens of new plug-in models planned, including many aimed at wealthier buyers. Investors are excited by the startups, several of which went public this year and have seen their valuations soar.

Some upstarts, like Rivian Automotive LLC and Nikola Corp. are choosing to align with traditional auto makers that have deeper pockets and the car-manufacturing expertise to help them realize their plans. This week, GM said it would take an 11% stake in Nikola, a maker of electric and hydrogen fuel trucks, in exchange for helping it to engineer and build its first model.