Lucid pulls $1.5 billion from Saudi wealth fund, CEO warns it’s ‘dangerous’ to rely on its ‘bottomless wealth’
Saudi Arabia is going to lend Lucid Motors even more money as the EV startup struggles to reduce its losses. Lucid announced as part of its second-quarter earnings report on Monday that an affiliate of the Saudi sovereign wealth fund is going to provide another $1.5 billion, with half of the money coming in the form of a private placement and the other half in the form of a debt facility.
The deal deepens the relationship between Lucid and its majority owner, which has already committed to buying at least 50,000 EVs in the coming years, and is helping the company build a new factory in the Kingdom.
This is the second time Lucid has turned to Saudi Arabia for more funding, with Lucid CEO Peter Rawlinson saying in a March 2024 interview with the Financial Times that he is wary of becoming overly reliant on the kingdom’s sovereign wealth fund. “If I take the mindset that there is a bottomless pool of money coming from the PIF, that’s very dangerous, I would never do that, I respect them too much for that,” he told the financial outlet.
This new funding comes after Lucid announced it had a $643 million loss in the second quarter of 2024, while setting a new sales record for its electric luxury sedan, generating $200 million in revenue. Lucid reported it had $1.35 billion in cash and cash equivalents at the end of the second quarter.
Lucid doesn’t just need the money to plug losses as it tries to build a market for its luxury sedan, the Air. It also needs capital to help fund the upcoming launch of its first electric SUV, known as the Gravity. Lucid has said the Gravity will go into production by the end of 2024 and has expressed hope it will be a success in North America given the form factor’s popularity in the region. The company laid off about 400 employees, or about 6% of its workforce, in May 2024 as part of a restructuring ahead of the launch of the Gravity SUV.