Saudi Arabia is pouring more money into Lucid Motors as the EV startup struggles to erase its losses. Lucid announced Monday that an affiliate of the Saudi sovereign wealth fund is investing an additional $1.5 billion, half in a private placement and half in a loan facility, as part of its second-quarter earnings report.
The deal will also strengthen the relationship between Lucid and its largest shareholder, who has already committed to buying at least 50,000 electric vehicles in the coming years and is helping Lucid build a new factory in Saudi Arabia.
It is the second time Lucid has looked to Saudi Arabia for more money, after Lucid CEO Peter Rawlinson told the Financial Times in March 2024 that he was wary of relying too heavily on the country’s sovereign wealth fund. “If you adopt the mindset that there is infinite wealth in the PIF, that is very dangerous and something I would never do. I have so much respect for them,” he told the Financial Times.
The new funding comes as Lucid reported a loss of $643 million in the second quarter of 2024, despite setting a new sales record for its electric luxury sedan, which generated $200 million in revenue. Lucid reported $1.35 billion in cash and cash equivalents at the end of the quarter.
Rawlinson described the capital investment as “firm further support” of Saudi Arabia’s long-term commitment to Lucid.
“We are very aligned, and this goes beyond just a financial agreement,” Rawlinson said on the company’s earnings call Monday.
“We are proud to be part of Saudi Arabia’s ambitious Vision 2030, a company that is transforming to become a sustainable economy.”
He also balked at the idea that Saudi interest was waning. “It’s often portrayed that the Saudis will get tired of Peter playing with cars,” he muses. “No, you know, we talk regularly. I’ve talked to my chairman (Turki Al-Novaiser) and we’re both absolutely committed. You know, the conversation is more about, ‘Peter is managing things right. We want this midsize car and this product. Is Gravity managing it right?’”
Lucid's Q2 total revenue figures showed year-over-year growth for both the quarter and the six-month period, but a closer look at the results reveals the influence of Saudi Arabia.
By region, Lucid generated $155 million in North American revenue in Q2, up 12% year-over-year. However, compared to the first half of this year, North American revenue revenue declined. Lucid reported $269.8 million in North American revenue for the first half of this year, down 5.7% from $286.2 million in the same six-month period in 2023.
Sales in Saudi Arabia helped fill the gap, with revenues from the country soaring 14-fold to $95.2 million in the first half of 2024 compared to the same period last year.
Lucid doesn’t just need the money to stop the bleeding as it tries to crack the luxury sedan market with the Air. It also needs capital to help launch its first electric SUV, the Gravity. Lucid says the Gravity will be in production by the end of 2024, and it’s hoping it’ll be a success in North America given the form factor’s popularity in the region. The company has laid off about 400 employees, or about 6 percent of its workforce, as part of a restructuring ahead of the Gravity SUV’s May 2024 launch.
