Saudi Arabia’s Public Investment Fund Pumps $1 Billion into Lucid Electric Car Company
In a significant move that saw Lucid’s shares surge by 18 percent, the electric carmaker announced a substantial $1 billion investment from Saudi Arabia’s Public Investment Fund.
The investment is being funneled through Ayar Third Investment Co., an affiliate of the Kingdom’s sovereign wealth body and Lucid’s majority stockholder. This injection of funds will come in the form of a newly created series of convertible preferred stock, convertible into approximately 280 million shares, as per a filing with the US securities regulator.
With the Saudi government holding a 60 percent stake in Lucid, this investment is part of a broader strategy to diversify the Kingdom’s economy away from its dependence on oil.
Peter Rawlinson, the CEO and chief technology officer of Lucid Group, expressed his excitement over the continued support from the PIF, stating, “We are extremely pleased to receive this strong, continued support from the PIF, as we work to solidify our place as the world’s leading EV technology company.”
Rawlinson further emphasized the company’s focus on long-term investments in technology and manufacturing capabilities, with PIF’s support playing a crucial role in their growth strategy. The upcoming launch of their Gravity SUV later this year is expected to be a game-changer for Lucid.
Lucid’s Expansion Plans and Market Competitiveness
Amidst a slowdown in the global electric vehicle market and increasing competition, Lucid aims to produce 9,000 units by 2024, surpassing the 8,428 vehicles manufactured last year. The company’s Air luxury sedans directly compete with Tesla’s Model S and other EVs from top brands like Mercedes-Benz, BMW, Audi, and Porsche.
In a bid to reassure investors, Lucid highlighted its financial strength, with $4.8 billion in available funds at the end of 2023, including $4.3 billion in cash. The company also affirmed its liquidity until at least 2025 and forecasted $1.5 billion in capital spending for 2024, focusing on the launch of their Gravity SUV line.
Lucid’s Expansion into Saudi Arabia and the EV Market Landscape
Lucid’s venture into the Saudi market gained traction with the opening of its first plant outside the US in the Kingdom, capable of producing 5,000 EVs annually. The Saudi government’s commitment to purchasing up to 100,000 vehicles from Lucid over the next decade further solidifies the company’s presence in the region.
Additionally, in a bid to bolster the electric vehicle sector, Crown Prince Mohammed bin Salman announced the launch of CEER in November 2022. This government-owned enterprise is set to design, manufacture, and sell battery-powered vehicles in Saudi Arabia, adding to the growing competition in the market.
With Lucid’s strategic investments, strong financial position, and expansion plans, the company is poised to make significant strides in the evolving landscape of electric vehicles.