Lucid Group Inc. is set to receive a cash infusion of up to $1.5 billion from one of its major investors, an affiliate of Saudi Arabia’s Public Investment Fund. This marks the second funding boost for the electric-vehicle maker this year. The investment comprises two agreements with Ayar Third Investment Company: one allowing Ayar to buy $750 million of convertible preferred stock and the other as a $750 million unsecured loan.
This new funding comes as Lucid strives to overcome production challenges and faces a slowdown in EV demand. Following the announcement, Lucid shares rose by 10% in late trading hours in New York, although the stock had fallen about 29% for the year by Monday’s close.
Earlier this year, Lucid, based in Newark, California, received $1 billion from Ayar in March. Shortly thereafter, the company announced it would reduce its workforce by about 6% by the end of the third quarter. This came after a difficult 2023, during which Lucid struggled with production, staff cuts, and changes in its management team.
The company plans to use the new funds for general corporate purposes, including capital expenditures and working capital. This funding is expected to support the manufacturer through the fourth quarter of the next year.
Lucid also reported second-quarter revenue of $200.6 million on Monday, surpassing the average Wall Street estimate of $185.8 million. However, it reported an adjusted loss of 29 cents per share, exceeding the anticipated 27 cents per share loss.
Despite its challenges, Lucid remains one of the few pure-play EV makers in the US that consistently delivers vehicles, although it is much smaller compared to market leader Tesla Inc. Lucid currently produces the Lucid Air sedan, starting at $69,900, and plans to launch the Lucid Gravity SUV later this year.
“The new round of funding sees us right through a key phase of not just the launch of Gravity but the ramp-up,” said Chief Executive Officer Peter Rawlinson in an interview. The Gravity SUV, unveiled in November, is expected to cost less than $80,000. Last week, Rawlinson posted a video driving the first pre-production Lucid Gravity off the line at the company’s Arizona manufacturing facility.
Lucid announced in July that it had delivered 2,394 vehicles and produced 2,110 during its second quarter, exceeding expectations. On Monday, the company reaffirmed its forecast of producing 9,000 vehicles this year.
