Lucid Motors, the luxury electric vehicle manufacturer, is once again teaming up with its major investor, Saudi Arabia, in a move aimed at tackling the formidable challenges of producing and marketing its high-end electric sedan.
In a regulatory filing on Monday morning, Lucid revealed that Ayar Third Investment, an affiliate of Saudi Arabia’s Public Investment Fund, has committed to purchasing $1 billion worth of Lucid’s stock. This infusion will augment Saudi Arabia’s existing ownership stake of approximately 60%.
This new funding injection follows closely on the heels of Lucid’s recent disclosure to investors that it intends to manufacture roughly 9,000 units of its Air electric vehicles this year, a modest increase from its production volume last year. Despite this optimistic outlook, Lucid incurred a substantial loss of $2.8 billion in 2023, ending the year with nearly $1.4 billion in cash and equivalents. The company has been grappling with sluggish demand for its costly Air sedan, prompting several price cuts in recent months in a bid to stimulate sales. Lucid is also gearing up to commence production of its electric Gravity SUV by the year’s end.
The announcement of this fresh investment comes on the heels of Lucid CEO Peter Rawlinson’s cautious remarks to the Financial Times. He expressed wariness about over-reliance on Saudi Arabia’s financial support, emphasizing the importance of prudence and respect in the partnership. Rawlinson stressed, “If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous, that is something I will never do, I respect them far too much for that.”
With this latest capital infusion, Lucid Motors is striving to fortify its financial position and overcome the hurdles of high production costs and tepid consumer interest. Time will tell whether this strategic alliance with Saudi Arabia will steer Lucid toward smoother roads ahead in the competitive electric vehicle market.
(Source: Market Watch | PR Newswire | Quartz)
