Mohammed Bin Salman-Led Sovereign Fund PIF's Affiliate To Invest $1.5B In EV Maker Lucid

California-based EV maker Lucid Group LCID said on Monday that it has entered into agreements with an affiliate of its largest shareholder, Saudi Arabia’s Public Investment Fund, led by Crown Prince Mohammed bin Salman, for a $1.5 billion investment.

What Happened: Lucid Group said that the PIF affiliate will buy $750 million of convertible preferred stock via private placement and provide for a $750 million unsecured delayed draw term loan facility.

The new influx of capital comes as the company is gearing up to start production of its Gravity SUV, its second vehicle after its flagship Lucid Air sedan.

The company has already started pre-production of the Gravity SUV, which is expected to start at under $80,000. The premium SUV, expected to rival Tesla’s Model X SUV in the market, is expected to enter production in late 2024.

The latest capital raise of $1.5 billion from the affiliate of Saudi Arabia’s sovereign wealth fund will strengthen its liquidity runway at least into the fourth quarter of 2025, the company said.

Why It Matters: Lucid shares, however, closed down 3.9% at $3 on Monday after the company reported wider-than-expected losses for the second quarter. The EV maker reported a loss of 29 cents per share on an adjusted basis, wider than the Street consensus estimate of a loss of 27 cents.

This is despite the company crossing the threshold of 2,000 deliveries per quarter for the first time during the quarter. The company delivered 2,394 vehicles and reported a loss of $112,688 per vehicle delivered, not including overhead costs.

Saudi Arabia’s PIF has been a long-standing supporter of Lucid, investing several billions into the EV startup. With the latest investment, the PIF has invested about $7.9 billion into the EV maker since 2018.

Price Action: Lucid’s shares were up 5.67% in after-market hours, after closing down by 3.85% at $3 on Monday, according to Benzinga Pro data.

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Photo courtesy: Lucid