Saudi Arabia is investing more cash into Lucid Motors as the electric vehicle startup seeks to close its losses. In its second-quarter earnings report announced Monday, Lucid said that an affiliate of the Saudi sovereign wealth fund is committing another $1.5 billion, half coming in a private placement and the other half in a loan facility.
Strengthening Relationships Between Lucid and Saudi Arabia
The deal further deepens the ties between Lucid and its majority owner, who have already agreed to purchase at least 50,000 of its EVs over the next several years and is helping build a brand new factory for them in the Kingdom.
Dependence on Saudi Funding
It’s the second time since CEO Peter Rawlinson told the Financial Times he was wary of being over-reliant on PIF’s endless supply. In March 2024, Lucid returned for more money from Saudi Arabia. “If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous; that is something I will never do; I respect them far too much for that,” he told the financial outlet.
Lucid’s Financial Losses and New Financing
The latest infusion comes as Lucid reported losing $643 million during Q2 2024 even though sales hit record levels generating $200 million in revenue from luxury electric sedans alone. At the end of Q2, it had $1.35 billion in cash equivalents left on hand according to company reports.
CEO’s Statement on Saudi Commitment
Rawlinson described the injection of capital as a “resounding further endorsement” of Saudi Arabia’s long-term commitment in Lucid. “We are so aligned, this transcends a mere financial arrangement,” Rawlinson said during the company’s earnings call Monday. “We are a cornerstone of Saudi Arabia’s ambitious Vision 2030 to transition their company to add to a sustainable economy, and we are proud to participate in this.”
Continued Saudi Interest
He also pushed back on the idea that Saudi Arabia’s interest was waning. “It’s often portrayed, how long is it before Saudi is going to get fed up with Peter playing with his cars?” he mused. “It’s not that, you know, we have regular dialogue. I have with my chairman [Turqi Alnowaiser] and we are absolutely both committed. You know, the dialogue is much more of ‘Peter keeps things on track. We want this midsize, we want these products. Is Gravity on track?’”
Lucid Impact of Saudi Sales on Revenue
While Lucid’s total second-quarter revenue figures show year-over-year growth — on both a quarter and six-month time frame — a deeper dive into the result reveals Saudi Arabia’s influence. On a regional basis, Lucid generated $155 million in North American sales in the second quarter, a 12% increase from the same period last year. However, when results for the first half of the year were compared, North American sales declined. Lucid reported $269.8 million in revenue from North American sales during this period, which is 5.7% lower than what it earned ($286.2 million) within the same timeframe last year.
Saudi Arabia is investing more cash into Lucid Motors as the electric vehicle startup seeks to close its losses. In its second-quarter earnings report announced Monday, Lucid said that an affiliate of the Saudi sovereign wealth fund is committing another $1.5 billion, half coming in a private placement and the other half in a loan facility.
Strengthening Relationships Between Lucid and Saudi Arabia
The deal further deepens the ties between Lucid and its majority owner, who have already agreed to purchase at least 50,000 of its EVs over the next several years and is helping build a brand new factory for them in the Kingdom.
Dependence on Saudi Funding
It’s the second time since CEO Peter Rawlinson told the Financial Times he was wary of being over-reliant on PIF’s endless supply. In March 2024, Lucid returned for more money from Saudi Arabia. “If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous; that is something I will never do; I respect them far too much for that,” he told the financial outlet.
Lucid’s Financial Losses and New Financing
The latest infusion comes as Lucid reported losing $643 million during Q2 2024 even though sales hit record levels generating $200 million in revenue from luxury electric sedans alone. At the end of Q2, it had $1.35 billion in cash equivalents left on hand according to company reports.
CEO’s Statement on Saudi Commitment
Rawlinson described the injection of capital as a “resounding further endorsement” of Saudi Arabia’s long-term commitment in Lucid. “We are so aligned, this transcends a mere financial arrangement,” Rawlinson said during the company’s earnings call Monday. “We are a cornerstone of Saudi Arabia’s ambitious Vision 2030 to transition their company to add to a sustainable economy, and we are proud to participate in this.”
Continued Saudi Interest
He also pushed back on the idea that Saudi Arabia’s interest was waning. “It’s often portrayed, how long is it before Saudi is going to get fed up with Peter playing with his cars?” he mused. “It’s not that, you know, we have regular dialogue. I have with my chairman [Turqi Alnowaiser] and we are absolutely both committed. You know, the dialogue is much more of ‘Peter keeps things on track. We want this midsize, we want these products. Is Gravity on track?’”
Impact of Saudi Sales on Revenue
While Lucid’s total second-quarter revenue figures show year-over-year growth — on both a quarter and six-month time frame — a deeper dive into the result reveals Saudi Arabia’s influence. On a regional basis, Lucid generated $155 million in North American sales in the second quarter, a 12% increase from the same period last year. However, when results for the first half of the year were compared, North American sales declined. Lucid reported $269.8 million in revenue from North American sales during this period, which is 5.7% lower than what it earned ($286.2 million) within the same timeframe last year.
The Surge in Saudi Sales
Sales in Saudi Arabia are what helped close that gap. Revenue from sales in Saudi Arabia skyrocketed 14-fold to $95.2 million in the first six months of 2024 from the same period last year.
Need for Capital for SUV Lucid Launch
Lucid doesn’t just need money to staunch the bleeding as it tries to carve out a market for its luxury sedan, the Air. It also needs capital to help with the upcoming launch of its first electric SUV, known as Gravity. Lucid has said the Gravity will enter production by the end of 2024 and has put its hopes on it becoming a success in North America given the popularity of the form factor in the region. The company laid off about 400 employees, or roughly 6% of its workforce, in May 2024 as part of a restructuring ahead of the launch of the Gravity SUV.
Sales in Saudi Arabia are what helped close that gap. Revenue from sales in Saudi Arabia skyrocketed 14-fold to $95.2 million in the first six months of 2024 from the same period last year.
Need for Capital for SUV Lucid Launch
Lucid doesn’t just need money to staunch the bleeding as it tries to carve out a market for its luxury sedan, the Air. It also needs capital to help with the upcoming launch of its first electric SUV, known as Gravity. Lucid has said the Gravity will enter production by the end of 2024 and has put its hopes on it becoming a success in North America given the popularity of the form factor in the region. The company laid off about 400 employees, or roughly 6% of its workforce, in May 2024 as part of a restructuring ahead of the launch of the Gravity SUV.
