The latest investment by the sovereign wealth fund
underscores a key advantage Lucid has in the race for survival among struggling
EV startups.
The Saudi government, which has a 60% stake, has invested
billions in Lucid's success as part of a strategy to diversify the Kingdom's
economy beyond oil.
Ayar Third Investment Company, a PIF affiliate, will buy $1
billion in convertible preferred stock and will be able to convert the
preferred stock into about 280 million shares, according to a filing with the
U.S. securities regulator.
The California-based company, which has been facing
weaker-than-expected demand, said it intends to use the proceeds for corporate
purposes and capital expenditure, among other things.qa
Lucid is one of several EV startups hit hard by the slowdown
in demand growth and a price war sparked by Tesla.
The EV maker, headed by a former Tesla executive, expects to
make 9,000 units in 2024, compared with the 8,428 vehicles it made last year.
Lucid's Air luxury sedans compete with Tesla's Model S and
luxury EVs from Mercedes-Benz, BMW, Audi and Porsche, among other brands.
The announcement likely extends the capital run rate, said
Andres Sheppard, senior equity analyst at Cantor Fitzgerald, adding that Lucid
is likely to make 9,500 vehicles this year and 20,000 units in 2025.
Lucid had said in its fourth-quarter financial presentation
last month that it had sufficient liquidity "at least until 2025" and
forecast $1.5 billion in capital spending in 2024 as it pushes to launch its
Gravity SUV line later this year.
The company had $4.8 billion in available funds at the end
of 2023, including $4.3 billion in cash.
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