Lucid Group Inc. is receiving a cash injection of up to $1.5 billion from an affiliate of Saudi Arabia’s Public Investment Fund as the electric car maker prepares its first SUV.
Ayar Third Investment Company has agreed to make the investments by purchasing $750 million worth of convertible preferred stock and providing a $750 million unsecured loan, Lucid said in a statement on Monday. The new funds come as the automaker works to overcome production hurdles and cope with falling demand for electric vehicles.
Lucid shares rose by as much as 16 percent before trading began on Tuesday. By the close of trading on Monday, the value was down around 29 percent for the year.
The Newark, California-based electric car maker received $1 billion from Ayar back in March. A few weeks later, Lucid announced it would cut about 6% of its workforce by the end of the third quarter. The news followed a difficult 2023 in which the company struggled to increase production, cut staff and experienced a shakeup at the top of its leadership team.
Lucid said it plans to use the new capital injection for general corporate purposes, including capital expenditures and working capital, and the money will fund the manufacturer through the fourth quarter of next year.
The company also reported second-quarter revenue of $200.6 million, beating Wall Street’s average estimate of $185.8 million. However, it lost 29 cents per share on an adjusted basis during the same period, more than the 27 cents per share expected by analysts.
Lucid was one of the few electric car manufacturers to go public in the US in recent years, but has hardly been able to match the success of market leader Tesla Inc. The manufacturer currently offers just one vehicle, the Lucid Air sedan, which starts at $69,900. An SUV, the Lucid Gravity, is also due to hit the market later this year.
“The new round of financing will not only take us through a key phase of Gravity’s launch, but also through the ramp-up phase,” CEO Peter Rawlinson said in an interview.
Lucid unveiled the Gravity in November and said the SUV is expected to cost less than $80,000. Rawlinson released a video last week showing him driving the first Lucid Gravity off the assembly line ahead of production at the company’s Arizona manufacturing facility.
The company said in July that it delivered 2,394 vehicles and produced 2,110 in the second quarter, beating expectations. On Monday, Lucid reiterated its forecast that it expects to produce 9,000 vehicles this year.
