EV Maker Lucid Receives Further $1.5bn in Saudi Funding Ahead of SUV Launch

Lucid Motors has received another $1.5bn in funding from its largest shareholder, Saudi Arabia’s Public Investment Fund, giving the Californian electric vehicle start-up vital new cash to navigate a global slowdown in demand and launch a mass-market SUV.

The PIF, which owns about 60 per cent of Lucid, would buy $750mn in convertible preferred stock and provide a delayed draw loan facility of $750mn through an affiliate investment company called Ayar, according to a statement on Monday. The funding comes on top of a $1bn injection in March and raises the total that PIF has invested to approximately $8bn.

Lucid shares rose 7 per cent in after-hours trading. Its shares have fallen 53 per cent in the past 12 months and 70 per cent since the company first listed in the US via a special purpose acquisition company merger in July 2021.

Founder Peter Rawlinson, the former chief vehicle engineer at rival Tesla, said in an interview earlier this year that Lucid cannot rely on the “bottomless wealth” of its owner and must find ways to cut costs and boost sales. Lucid markets itself as having more advanced battery technology and driving range than rivals such as Tesla, Volkswagen and Hyundai.

Lucid makes only one model, the Air sedan, and has struggled to get traction in an increasingly crowded EV field, with a basic model costing almost $70,000. Rawlinson said he hoped that the launch of the Gravity SUV later this year would broaden the pool of potential buyers. However, it is also aimed at the top of the market and may cost about $80,000.

Longer-term, the company is designing a smaller, more affordable vehicle that will be produced at a factory under construction in Saudi Arabia as soon as 2026.

The announcement came as Lucid released its second-quarter earnings on Monday. Revenue increased by a third from a year ago to $200mn in the three months to June 30, beating analysts’ expectations, while deliveries grew to 2,394 vehicles, a 71 per cent jump from the same period in 2023. Rawlinson said it remained on track to produce 9,000 cars this year. By comparison, Tesla delivered 443,956 vehicles in the second quarter. 

The EV maker’s quarterly net loss expanded to $790mn from $764mn last year. For 2023 overall its net loss reached $2.8bn.

(Financial Times, August 6, 2024)