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Business Energy

Luxury EV maker Lucid to raise $1 billion from Saudi Arabia's PIF affiliate

Ayar Third Investment Co. will be able to convert preferred stock into about 280m shares



A Lucid Motors facility is pictured in Costa Mesa, California.
Image Credit: Reyters

Lucid is raising $1 billion in capital from an affiliate of Saudi Arabia's Public Investment Fund (PIF), it said on Monday, sending the shares of the luxury electric carmaker up nearly 20%.

The latest investment by the sovereign wealth fund underscores a key advantage Lucid has in the race for survival among struggling EV startups.

The Saudi government, which has a 60% stake, has invested billions in Lucid's success as part of a strategy to diversify the Kingdom's economy beyond oil.

Ayar Third Investment Company, a PIF affiliate, will buy $1 billion in convertible preferred stock and will be able to convert the preferred stock into about 280 million shares, according to a regulatory filing with the U.S. securities regulator.

The California-based company, which has been facing weaker-than-expected demand, said it intends to use the proceeds for corporate purposes and capital expenditure among other things.

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Lucid is one of several EV startups hit hard by the slowdown in demand growth and a price war sparked by Tesla.

Lucid, headed by a former Tesla executive, expects to make 9,000 units in 2024, compared with the 8,428 vehicles it made last year.

Lucid's Air luxury sedans compete with Tesla's Model S and luxury EVs from Mercedes-Benz, BMW, Audi and Porsche, among other brands.

Lucid had last month said in its fourth-quarter financial presentation that it had sufficient liquidity "at least until 2025" and forecast $1.5 billion in capital spending in 2024 as it pushes to launch its Gravity SUV line later this year.

The company had $4.8 billion in available funds at the end of 2023, including $4.3 billion in cash.

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