American electric vehicle startup Lucid Group has just secured another $1.5 billion cash infusion from Saudi Arabia’s Public Investment Fund (PIF) affiliate ahead of the official launch of its first electric SUV, the Gravity.
Lucid receives $1.5B infusion from Saudi PIF
According to the press release, Lucid Group will receive an investment of up to $1.5 billion from its majority stockholder, Ayar Third Investment Company of Saudi Arabia’s PIF.
Ayar will buy $750 million of convertible preferred stock via private placement and offer another $750 million in the form of an unsecured loan, with the investment subject to “certain terms and conditions.”
Lucid aims to utilize the new cash infusion from Ayar to fund its general corporate purposes, such as capital expenditures and working capital. It expects the money to enable its operations through the fourth quarter of 2025.
Investment to support production ramp-up
The news comes as Lucid Motors struggles to overcome production challenges and waning demand for electric vehicles.
Notably, this fresh investment marks the second time Lucid Group received much-needed funding for the year. In March 2024, Ayar invested $1 billion to fuel Lucid’s electric vehicle plans. After several weeks, the electric automaker announced an approximately 6% workforce cut by the end of Q3 2024. These setbacks followed a challenging 2023, which saw Lucid struggle to increase production, lay off workers, and reorganize the top of its management ranks.
Now, Lucid expects the upcoming Gravity three-row SUV to attract a vast new customer base, potentially yielding much-needed profitability. The latest funding should help the company ramp up production at the existing Arizona factory over the next year. As per the report, the company will kick off production by the end of 2024. Lucid expects the Gravity SUV to cost below $80,000.
“The new round of funding sees us right through a key phase of not just the launch of Gravity but the ramp up.”
Chief Executive Officer Peter Rawlinson said in an interview
Achieving profitability
Lucid, like Rivian, has been spending hundreds of millions of dollars every quarter to fuel its operations. It offers the innovative Air sedan but has not yet reached high-scale production to cover its high costs. On Monday, Lucid reiterated its target to produce only 9,000 Air units in 2024, indicating a slight increase from last year.
To reach profitability, the American EV startup must significantly increase production by introducing new, mass-market vehicles and securing substantial funding. The Gravity electric SUV is central to this strategy.
Lucid ended the second quarter with $4.28 billion in liquidity and a $790 net loss. With Ayar’s fresh $1.5 billion commitment, the company is confident that it has sufficient liquidity runway until at least Q4 2025.
