Lucid Receives $1 Billion Injection from Saudi Sovereign Wealth Fund... Stock Rises 5%

Estimated 60% Stake in Lucid
Investment Scale of 5.4 Billion USD Since 2018

American electric vehicle manufacturer Lucid has secured a $1 billion (approximately 1.3 trillion KRW) investment from the Saudi Arabian Public Investment Fund (PIF), its largest shareholder. This capital injection is seen as a much-needed relief for Lucid, which has recently been facing challenges due to slowing electric vehicle demand and price competition.

On the 25th (local time), Lucid announced in a statement that it had raised $1 billion from Ayar Sird Company, an investment affiliate of PIF, its largest shareholder. The funding was structured by purchasing $1 billion of privately issued convertible preferred shares, which will then be converted into approximately 280 million preferred shares. The funds are planned to be used for capital expenditures and working capital.

Peter Rawlinson, CEO of Lucid Group, said, "We are very pleased to receive such strong and ongoing support from PIF as we strive to solidify our position as the world's leading electric vehicle (EV) technology company."

Morgan Stanley analyst Adam Jonas wrote in a note to clients, "This PIF investment is a somewhat positive development," adding, "There were questions about whether Saudi Arabia would continue investing in the EV industry, and this helps to resolve those doubts."

Lucid has recently felt the strain of expanding production due to a lack of funds. In last month's earnings report, the company told investors it plans to produce about 9,000 units of its premium sedan, the Air, in 2024, slightly higher than the 8,500 units produced the previous year. It also reported a loss of 29 cents per share in the fourth quarter, and as of the end of 2023, its cash and cash equivalents stood at $1.4 billion, down from $1.7 billion the previous year.

With this PIF investment, Lucid is now evaluated to be able to keep its promise of having "no operational issues at least until 2025." PIF has stated that it has invested about $5.4 billion in Lucid since its initial investment in 2018. According to data compiled by Bloomberg, PIF’s ownership stake in Lucid is estimated to be around 60%.

Meanwhile, on the New York Stock Exchange that day, Lucid’s stock closed at $2.92, up 5.42% from the previous session. The news of the PIF investment caused the stock to rise by about 16% intraday at one point. Lucid’s shares have fallen about 30% so far this year.