Lucid Group Inc. (NASDAQ:LCID) saw a significant increase in its stock price after announcing a $1.5 billion investment from an affiliate of Saudi Arabia’s Public Investment Fund. This comes as the electric vehicle manufacturer prepares to launch its first sport utility vehicle.
Ayar Third Investment Company will provide the funds through $750 million in convertible preferred stock and a $750 million unsecured loan, as disclosed by Lucid on Monday. This new funding comes as the company addresses production challenges and adapts to slowing demand for electric vehicles.
Lucid’s shares surged by up to 13% following the announcement, representing the largest gain in over three weeks. Despite this, the stock was down approximately 29% for the year up to Monday’s close.
Earlier this year, the Newark, California-based EV manufacturer received $1 billion from Ayar in March. Shortly after, Lucid announced plans to reduce its workforce by about 6% by the end of the third quarter. The company has faced challenges in increasing production, cutting staff, and experiencing management changes throughout 2023.
The new capital is intended to support general corporate needs, including capital expenditures and working capital, and is expected to sustain the company through the end of next year.
In its second-quarter report, Lucid posted revenue of $200.6 million, exceeding the average Wall Street estimate of $185.8 million. However, the company reported an adjusted loss of 29 cents per share, worse than the anticipated 27 cents loss.
Lucid, which went public in recent years along with several other EV makers, has struggled to match the success of Tesla Inc. (NASDAQ:TSLA). Currently, the company offers the Lucid Air sedan, priced at $69,900, and plans to launch the Lucid Gravity SUV later this year.
Chief Executive Officer Peter Rawlinson emphasized that the new funding will be essential for advancing both the launch of the Gravity and the overall ramp-up. The Gravity was unveiled in November and is expected to be priced below $80,000. Rawlinson recently shared a video of himself driving the first pre-production Lucid Gravity from the company’s Arizona manufacturing facility.
In July, Lucid announced that it had delivered 2,394 vehicles and produced 2,110 during the second quarter, exceeding expectations. The company reaffirmed its forecast to produce 9,000 vehicles this year.