According to Reuters, on March 25th, luxury electric vehicle manufacturer Lucid announced that it will raise $1 billion in funding from Ayar Third Investment Company, a subsidiary of the Saudi Arabian Public Investment Fund (PIF). Subsequently, the company's stock price rose by approximately 8%.
Reuters pointed out that compared to other struggling electric vehicle startups, the latest investment from PIF is a significant competitive advantage for Lucid. As part of Saudi Arabia's economic diversification strategy, the government has already invested billions of dollars in Lucid to date.
As per a filing submitted to the U.S. Securities and Exchange Commission, Ayar Third Investment Company will purchase $1 billion of convertible preferred stock in Lucid, convertible into approximately 280 million shares. Lucid stated that it intends to use this funding for corporate purposes and capital expenditures.
Lucid has been facing challenges with market demand falling below expectations. In addition to slowing market demand, the price war initiated by Tesla has also impacted the company significantly. According to their projections, Lucid plans to produce 9,000 vehicles in 2024, compared to 8,428 vehicles produced last year. The competition for Lucid Air luxury sedan includes not only Tesla Model S but also luxury electric vehicles from brands like Mercedes-Benz, BMW, Audi, and Porsche.
Andres Sheppard, Senior Stock Analyst at Cantor Fitzgerald, stated that the announcement of new investment for Lucid may extend its capital turnover rate. Sheppard also added that Lucid could produce 9,500 vehicles this year and 20,000 vehicles in 2025.
In its financial report for the fourth quarter of last year, Lucid stated that it has "sufficient liquidity at least through 2025" and expects capital expenditures to reach $1.5 billion in 2024 as the company plans to launch the Gravity product line later this year. As of the end of 2023, the company had $4.8 billion in available funds, including $4.3 billion in cash.
