Lucid gets up to $1.5bn in funding ahead of electric SUV rollout

Lucid Group said on Monday its largest shareholder, Saudi Arabia's Public Investment Fund (PIF), will inject up to $1.5bn (R27.68bn) in cash as the electric vehicle maker looks to ramp up production of a new SUV.

The EV maker's shares jumped about 8% in extended trading after closing down 3.9% in the regular session.

The deal comes ahead of Lucid's planned production of its much-awaited Gravity SUV later this year and keeps the EV maker sufficiently funded until the fourth quarter of 2025.

Lucid will use the funds for tooling to produce the Gravity SUV and build its factory in Saudi Arabia, with an annual capacity of 150,000 vehicles per year, among other investments, CEO Peter Rawlinson told Reuters.

Ayar Third Investment has agreed to buy $750m (R13.85bn) worth of convertible preferred stock and provide a similar amount as a credit line, marking the second investment from the PIF affiliate this year.

"The $1.5bn helps to solidify the relationship between the PIF and Lucid further. There was some investor concern that should the PIF become frustrated with the company they wouldn't provide additional commitments," said Andres Sheppard, senior equity analyst at Cantor Fitzgerald.

"With this, the PIF's investment number shoots to essentially $8bn [R147.68bn]."

The sovereign wealth fund has a stake of about 60% in the company.

The company also reported second-quarter revenue above analysts' estimates as price cuts helped drive higher sales of its luxury electric sedans during the April to June period.

In February, Lucid cut prices of its flagship Air sedans by up to 10% to reignite sales as consumers increasingly opted for more budget-friendly petrol-electric hybrid cars in response to prevailing high interest rates.

Revenue for the second quarter was $200.6m (R3.70bn), compared with analysts' estimate of $192.1m (R3.55bn), according to LSEG data.

Lucid made 3,838 vehicles in the first half of the year and stuck to its target of making 9,000 units by the end of the year on Monday.

In the same quarter, the company delivered a record 2,394 vehicles, beating market expectations, while market leader Tesla reported a smaller than expected decline.

Lucid is gearing up to expand its product line with a more affordable mid-size car expected to roll out in late 2026.

On an adjusted basis, it reported a loss of 29c per share, wider than analysts' average estimate of a loss of 27cs. It ended the second quarter with cash and cash equivalents of $1.35bn (R24.92bn), compared with $1.37bn (R25.29bn) at the end of 2023.