Lucid Motors secures $1 billion investment from Saudi Arabia amid financial struggles

Lucid Motors, the luxury electric vehicle manufacturer, has announced a significant financial boost from its primary investor, Saudi Arabia.

According to a regulatory filing on Monday morning, Ayar Third Investment, an affiliate of Saudi Arabia’s Public Investment Fund, has committed to purchasing $1 billion worth of Lucid’s stock. This investment will increase the Kingdom’s ownership stake in Lucid to around 60%.

This injection of funds comes at a critical time for Lucid as it grapples with the high costs associated with manufacturing and selling its luxury electric sedan, the Lucid Air.

The company recently disclosed plans to produce approximately 9,000 Air vehicles this year, a slight increase from the previous year.

However, despite its efforts, Lucid reported a staggering loss of $2.8 billion in 2023, ending the year with approximately $1.4 billion in cash and equivalents.

Lucid has encountered challenges in finding buyers for its high-priced Air sedan and has resorted to multiple price cuts in recent months to stimulate sales. Additionally, the company is preparing to commence production of its electric Gravity SUV by the end of this year.

Interestingly, Lucid’s announcement of the investment follows CEO Peter Rawlinson’s cautionary remarks to the Financial Times regarding over-reliance on Saudi Arabian funding.

Rawlinson expressed concern about the potential risks associated with depending too heavily on the Public Investment Fund’s continuous financial support.

“If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous, that is something I will never do, I respect them far too much for that,” Rawlinson stated.

Despite Lucid’s financial struggles and cautious approach to funding, the latest investment from Saudi Arabia underscores the Kingdom’s continued confidence in the electric vehicle manufacturer’s prospects for growth and success.