Lucid Gets $1.5 Billion Lifeline Before Electric SUV Rollout

(Bloomberg) -- Lucid Group Inc. will get a cash infusion of as much as $1.5 billion from one of its biggest investors, an affiliate of Saudi Arabia’s Public Investment Fund, the second time this year the electric-vehicle maker has received much-needed funding.

The investment is part of two agreements with Ayar Third Investment Company, Lucid said in a statement Monday. One allows Ayar to purchase $750 million of convertible preferred stock, while the other is in the form of a $750 million unsecured loan. The fresh funding comes as the carmaker has been working to overcome production hurdles and is coping with slowing EV demand.

Lucid shares rose 10% at 4:21 p.m. in New York, in late trading hours. The stock was down about 29% so far this year, through Monday’s close. 

The Newark, California-based EV maker already received $1 billion from Ayar in March. A few weeks later, the company announced it would cut about 6% of its workforce by the end of the third quarter. The news followed a tough 2023, in which Lucid struggled to boost output, cut staff and saw a shakeup at the top of its management ranks.

Lucid said it intends to use its new cash infusion for general corporate purposes, including capital expenditures and working capital. The money is expected to fund the manufacturer through the fourth quarter of next year.

The company also reported on Monday second-quarter revenue of $200.6 million, beating the average Wall Street estimate of $185.8 million. However, it lost 29 cents a share on an adjusted basis during the period, more than the 27-cents-a-share loss analysts anticipated.

Lucid is one of few pure-play EV makers in the US that routinely delivers vehicles, but is small compared with market leader Tesla Inc. Currently the manufacturer, which targets the upper end of the battery-powered car market, makes just one vehicle, the Lucid Air sedan, which starts at $69,900. It also plans to launch a SUV, the Lucid Gravity, 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,” Chief Executive Officer Peter Rawlinson said in an interview.

The company unveiled the Gravity in November and said it expected the SUV to cost less than $80,000. Last week, Rawlinson posted a video in which he drove 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, beating expectations. On Monday, the company reaffirmed its previous forecast that it expects to make 9,000 vehicles this year.

(Updates with shares in third paragraph, CEO quote in eighth paragraph.)

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