Lucid Set to Raise $1 Billion From Saudi's PIF Affiliate

Lucid ( LCID ), the luxury electric carmaker, has announced that it is raising $1 billion in capital from Ayar Third Investment Company, an affiliate of Saudi Arabia's Public Investment Fund (PIF). The investment by the sovereign wealth fund has sent Lucid's shares up by nearly 20%, highlighting the advantages the company has in the race for survival amongst several struggling EV startups.

The Saudi government has a 60% stake in Lucid ( LCID ) and has invested billions in the company as part of its strategy to diversify Saudi Arabia's economy beyond oil. Ayar Third Investment Company will purchase $1 billion in convertible preferred stock and will have the option to convert the stock into approximately 280 million shares.

Lucid ( LCID ), which is based in California, has been dealing with weaker-than-expected demand and a price war sparked by Tesla. The company, which is led by a former Tesla executive, anticipates producing 9,000 units in 2024, compared to the 8,428 vehicles it created last year.

Lucid's Air luxury sedans are competitive with Tesla's Model S, along with luxury EVs from Mercedes-Benz, BMW, Audi and Porsche, among other brands. Lucid intends to use the proceeds for corporate purposes and capital expenditure, among other things.

In its fourth-quarter financial presentation last month, Lucid ( LCID ) reported having sufficient liquidity "at least until 2025" and estimated $1.5 billion in capital spending in 2024 as it focuses on launching 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.