EV maker Lucid to raise $1bn from Saudi affiliate
Latest investment underlines advantage Lucid has among electric vehicle start-ups
Detroit — Lucid is raising $1bn in capital from an affiliate of Saudi Arabia’s Public Investment Fund (PIF), it says, sending the shares of the luxury electric carmaker up 18% before the bell.
The latest investment by the sovereign wealth fund underscores a advantage Lucid has in the race for survival among struggling electric vehicle (EV) start-ups.
The Saudi government, which has a 60% stake, has invested billions in Lucid’s success as part of a strategy to diversify the kingdom’s economy beyond oil.
Ayar Third Investment Company, a PIF affiliate, will buy $1bn in convertible preferred stock and will be able to convert the preferred stock into about 280-million shares, according to a regulatory filing with the US securities regulator.
The California-based company, which has been facing weaker-than-expected demand, said it intended to use the proceeds for corporate purposes and capital expenditure among other things.
Lucid is one of several EV start-ups hit hard by the slowdown in demand growth and a price war sparked by Tesla. The company, headed by a former Tesla executive, expects to make 9,000 units in 2024, compared with the 8,428 vehicles it made last year.
Lucid’s Air luxury sedans compete with Tesla’s Model S and luxury EVs from Mercedes-Benz, BMW, Audi and Porsche, among other brands.
Lucid had last month said in its fourth-quarter financial presentation that it had sufficient liquidity “at least until 2025" and forecast $1.5bn in capital spending in 2024 as it pushes to launch its Gravity SUV line later this year.
The company had $4.8bn in available funds at the end of 2023, including $4.3bn in cash
Reuters