Saudi-backed Lucid Group to raise $1bn from PIF affiliate
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Saudi-backed Lucid Group to raise $1bn from PIF affiliate

Saudi-backed Lucid Group to raise $1bn from PIF affiliate

The automaker plans to use the proceeds for general corporate purposes including capital expenditures and working capital

Kudakwashe Muzoriwa
Lucid Group secures $1bn from Saudi PIF affiliate

Saudi-backed electric carmaker Lucid Group said on Monday it has secured a $1bn cash injection from its majority stockholder, Ayar Third Investment Company, an affiliate of the Public Investment Fund (PIF).

The new financing from Ayar is in the form of a private placement for convertible preferred stock and will be used in part for capital expenditure and as working capital.

“The convertible preferred stock sold to Ayar in the private placement will be sold in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended,” the luxury electric carmaker said in bourse filing.

Lucid plans to use the proceeds from the private placement for general corporate purposes, including capital expenditures and working capital.

“We continue to invest for the long term in both our technology and our vertically integrated manufacturing capabilities, with PIF’s support a key differentiator. With their support, we remain focused on accelerating our growth via deliveries, executing key business initiatives with a relentless focus on cost, and launching our game-changing Gravity SUV later this year,” said Peter Rawlinson, CEO and CTO of Lucid Group.

Last month, the company told investors it would build around 9,000 premium Air sedans in 2024, just modestly higher than the 8,500 it built last year and far short of the tens of thousands it touted on its road to the public markets.

Lucid’s first car, the Air, is assembled at the company’s facilities in the US – Casa Grande and Arizona, and Saudi Arabia’s King Abdullah Economic City (KAEC). Deliveries of Lucid Air are currently underway to customers in the US, Canada, Europe, and the Middle East.

PIF boosts Lucid’s growth ambitions

Meanwhile, Lucid inaugurated the first-ever car production facility in the Saudi port city of Jeddah last September.

The electric carmaker projected that the location of its first international manufacturing plant in Saudi Arabia may add up to $3.4bn in market value over 15 years.

The kingdom invested in Lucid in 2018 and steadily accumulated more shares until it held majority ownership when the automaker went public through a merger with a special purpose acquisition company (SPAC) in 2021.

Saudi Arabia also unveiled its electric car brand, Ceer, in November 2022.

Ceer, a joint venture with Taiwan’s Foxconn, will design, manufacture and sell a range of vehicles, including sedans and sports utility vehicles, for consumers in the kingdom and the MENA region.

Earlier in March, the PIF-backed electric vehicle firm awarded a $1.3bn (SAR5bn) contract for the construction of a manufacturing site in the KAEC. The plant will have dedicated zones for every stage of vehicle production, including a press shop, body shop, paint shop, and general assembly.

Read: PIF’s Ceer awards $1.3bn contract for EV factory in Saudi Arabia

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