Lucid announced on August 5, 2024, that its largest shareholder, Saudi Arabia’s Public Investment Fund (PIF), will inject up to $1.5 billion in cash to ramp up production of a new SUV. This news led to a 6% rise in Lucid’s shares in extended trading, following a 3.9% drop during regular trading hours.
The investment is critical as Lucid prepares to produce its highly anticipated Gravity SUV later this year. This financial boost ensures that the EV maker is sufficiently funded until the fourth quarter of 2025. Lucid CEO Peter Rawlinson stated that the funds will be used for tooling to produce the Gravity SUV and to build a factory in Saudi Arabia with an annual capacity of 150,000 vehicles, among other investments.
Ayar Third Investment, a PIF affiliate, has agreed to buy $750 million worth of convertible preferred stock and provide a similar amount as a credit line. This marks the second investment from Ayar Third Investment this year, further solidifying the relationship between PIF and Lucid. Andres Sheppard, senior equity analyst at Cantor Fitzgerald, noted that this investment alleviates investor concerns about PIF’s commitment to Lucid, bringing the total PIF investment in the company to approximately $8 billion. The sovereign wealth fund holds about a 60% stake in Lucid.
In addition to the investment news, Lucid reported second-quarter revenue that exceeded analysts’ estimates, driven by price cuts that boosted sales of its luxury electric sedans during the April-June period. In February, Lucid reduced prices of its flagship Air sedans by up to 10% to reignite sales as consumers increasingly opted for more budget-friendly gasoline-electric hybrid cars. The company’s second-quarter revenue was $200.6 million, surpassing the analysts’ estimate of $192.1 million.
Lucid produced 3,838 vehicles in the first half of the year and reaffirmed its target of making 9,000 units by the end of the year. In the second quarter, the EV maker delivered a record 2,394 vehicles, beating market expectations. The company also plans to expand its product line with a more affordable mid-size car, which is expected to launch in late 2026.
On an adjusted basis, Lucid reported a loss of 29 cents per share, slightly wider than analysts’ average estimate of a 27-cent loss. The company ended the second quarter with cash and cash equivalents of $1.35 billion, compared to $1.37 billion at the end of 2023. Lucid also lowered its capital expenditure forecast for 2024 by $200 million from its previous outlook of $1.5 billion.
