American electric vehicle startup Lucid gained another $1 billion investment from Saudi Public Investment Fund (PIF) affiliate Ayar Third Investment Co. on March 25.
Lucid raised $1B from Saudi’s PIF affiliate
According to the press release, Ayar bought $1 billion worth of a newly created series of convertible preferred stock through private placement. It can convert the preferred stock into approximately 280 million shares. Notably, it is subject to customary closing conditions.
“We are extremely pleased to receive this strong, continued support from the PIF, as we work to solidify our place as the world’s leading EV technology company. We continue to invest for the long term in both our technology and our vertically integrated manufacturing capabilities, with PIF’s support a key differentiator.”
Lucid Group CEO and CTO Peter Rawlinson
For context, the Kingdom of Saudi Arabia currently holds a 60% stake in Lucid in exchange for billions of investments. It will significantly aid the company in delivering its promised Gravity SUV this year.
“With their support, we remain focused upon accelerating our growth via deliveries, executing key business initiatives with relentless focus upon cost, and launching our game-changing Gravity SUV later this year.”
Lucid Group CEO and CTO Peter Rawlinson
Main purpose
Lucid, which has been struggling with lower-than-expected electric vehicle demand, shared that it plans to use the fresh investment primarily for corporate purposes and capital expenditure.
As previous reports unveiled, Lucid is among the several startups stumbling in the electric vehicle market due to the slower-than-expected uptake and Tesla-induced price war.
Considering all these, Lucid aims to only produce 9,000 EVs this year. This is a slight increase from its production record of 8,428 units in 2023.
Lucid’s financial state
Lucid disclosed during its Q4 2023 financial presentation in February that it had enough liquidity “at least until 2025.” It also shared its forecast of $1.5 billion in capital spending this year as it gears up to launch the new Gravity SUV line in late 2024.
Reuters reported that Lucid had $4.8 billion in available funds at the end of last year, including $4.3 billion in cash. However, it reported a net loss of $653.8 million in the same year.
Lucid hopes that its inaugural electric SUV, Gravity, can help the company boost sales and spark momentum in the market.
The news boosted Lucid’s shares by almost 20%, but it is still down by more than 60% over the last 12 months.
