Saudi Arabia is committing much more cash to Lucid Motors because the EV startup struggles to erase its losses. Lucid introduced Monday as a part of its second-quarter profits file that an associate of the Saudi sovereign wealth fund is committing some other $1.5 billion, with part coming within the type of a non-public placement and the opposite part as a mortgage facility.
The deal additionally additional deepens the binds between Lucid and its majority proprietor, which has already dedicated to shopping for no less than 50,000 of its EVs within the coming years, and helps the corporate construct a brand spanking new manufacturing facility within the Kingdom.
It’s the second one time Lucid has became to Saudi Arabia for more cash since Lucid’s CEO Peter Rawlinson advised the Monetary Occasions in a March 2024 interview that he was once cautious of being over-reliant at the Kingdom’s sovereign wealth fund. “If I undertake a mindset that there’s bottomless wealth from PIF, this is very unhealthy, this is one thing I can by no means do, I recognize them a ways an excessive amount of for that,” he advised the monetary outlet.
The brand new investment comes as Lucid introduced it misplaced $643 million in the second one quarter of 2024, regardless of atmosphere a brand new gross sales document for its electrical luxurious sedans that generated $200 million of earnings. Lucid reported it had $1.35 billion in money and money equivalents on the finish of the second one quarter.
Rawlinson described the injection of capital as a “resounding additional endorsement” of Saudi Arabia’s long-term dedication in Lucid.
“We’re so aligned, this transcends a trifling monetary association,” Rawlinson mentioned all through the corporate’s profits name Monday. “We’re a cornerstone of the Saudi Arabia’s formidable Imaginative and prescient 2030 to transition their corporate so as to add to a sustainable financial system, and we’re proud to take part on this.”
He additionally driven again on the concept Saudi Arabia’s pastime was once waning. “It’s incessantly portrayed, how lengthy is it prior to Saudi goes to get uninterested with Peter enjoying together with his vehicles?” he mused. “It’s now not that, you understand, we now have common discussion. I’ve with my chairman [Turqi Alnowaiser] and we’re completely each dedicated. You recognize, the discussion is a lot more of ‘Peter helps to keep issues on target. We would like this midsize, we wish those merchandise. Is Gravity on target?’”
Whilst Lucid’s overall second-quarter earnings figures display year-over-year enlargement — on each 1 / 4 and six-month time period — a deeper dive into the outcome finds Saudi Arabia’s affect.
On a regional foundation, Lucid generated $155 million in North American gross sales in the second one quarter, a 12% build up from the similar length closing 12 months. Income from North American gross sales fell, alternatively, when evaluating effects from the primary six months of the 12 months. Lucid reported $269.8 million in earnings from North The us gross sales within the first six months of the 12 months, a 5.7% lower from the $286.2 million from the similar six-month length in 2023.
Gross sales in Saudi Arabia is what helped shut that hole. Income from gross sales in Saudi Arabia skyrocketed 14-fold to $95.2 million within the first six months of 2024 from the similar length closing 12 months.
Lucid doesn’t simply want cash to staunch the bleeding because it tries to carve out a marketplace for its luxurious sedan, the Air. It additionally wishes capital to lend a hand with the impending release of its first electrical SUV, referred to as Gravity. Lucid has mentioned the Gravity will input manufacturing via the tip of 2024 and has put its hopes on it changing into a good fortune in North The us given the recognition of the shape issue within the area. The corporate laid off about 400 workers, or kind of 6% of its team of workers, in Would possibly 2024 as a part of a restructuring forward of the release of the Gravity SUV.
