A luxury EV maker is going to raise $1 billion

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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.
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 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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Reporting by Akash Sriram in Bengaluru and Joe White in Detroit; Editing by Arun Koyyur

A significant advantage Lucid has in the struggle to survive among faltering EV startups is highlighted by the sovereign wealth fund’s most recent investment.

As part of an effort to diversify the Kingdom’s economy away from oil, the Saudi government, which owns a 60% stake in Lucid, has poured billions of dollars into company success.

According to a regulatory filing with the U.S. Securities and Exchange Commission, Ayar Third Investment Company, an affiliate of the PIF, plans to purchase $1 billion in convertible preferred stock, which it can convert into approximately 280 million shares. S. securities oversight body.

The California-based company, which has been dealing with lower-than-expected demand, stated that it plans to use the proceeds, among other things, for capital expenditures and corporate purposes.

With 9,000 units produced in 2024, compared to 8,428 last year, Lucid, led by a former Tesla executive, is expecting stronger growth.

In its fourth-quarter financial report released last month, Lucid stated that it had enough cash on hand “at least until 2025” and projected $1.05 billion in capital expenditures in 2024 as it works to introduce its Gravity SUV line later this year.

By the end of 2023, the company had $4.8 billion in cash on hand as well as $4.3 billion in available funds.

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Editing by Arun Koyyur; reporting by Akash Sriram in Bengaluru and Joe White in Detroit.

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