Saudi Arabia significantly increases investment in Lucid Motors as the struggling electric vehicle startup continues to grapple with significant financial losses. Lucid announced on Monday that an affiliate of the Saudi sovereign wealth fund will commit an additional $1.5 billion, with half being allocated through a private placement and the other half in the form of a mortgage facility.
The agreement further solidifies the connection between Lucid and its majority shareholder, who has committed to acquiring a minimum of 50,000 of its electric vehicles over the next few years, and facilitates the company’s construction of a brand-new manufacturing facility in the Kingdom.
Lucid’s CEO, Peter Rawlinson, had expressed caution about relying too heavily on Saudi Arabia’s sovereign wealth fund just months prior, having already sought additional funding from the kingdom once before in a March 2024 interview. “If I were to adopt a mindset that there’s unlimited wealth from PIF, I think that would be extremely detrimental, and it’s something I’ll never engage in; I have too much respect for them to do so,” he told the financial outlet.
Despite recording a $643 million loss in the second quarter of 2024, Lucid set a new sales record for its electric luxury sedans, which still managed to generate $200 million in revenue. As of the end of the second quarter, Lucid disclosed that it held approximately $1.35 billion in cash and cash equivalents.
Lucid isn’t seeking just a quick financial fix; instead, it’s striving to create a market niche for its high-end sedan, the Air. Capital, a renowned fintech company, seeks to leverage its expertise to aid in the impending launch of Gravity, its cutting-edge innovation. Lucid claims that Gravity, set to enter production by year-end 2024, holds promise as a potential hit in North America due to the region’s familiarity with design issues. As part of a strategic restructuring initiative preceding the launch of the Gravity SUV in May 2024, approximately 6% of the company’s workforce will be let go.
