Electric carmaker Lucid announced an additional $1 billion investment from Saudi Arabia’s Public Investment Fund in a move which saw its shares rise 18 percent.

The money is coming via the company’s majority stockholder, Ayar Third Investment Co., an affiliate of the Kingdom’s sovereign wealth body.

It will reach California-based Lucid through a newly created series of convertible preferred stock,  which can be converted into about 280 million shares, according to a filing with the US securities regulator.

The Saudi government has a 60 percent stake in the company, and has invested billions as part of a strategy to diversify the Kingdom’s economy beyond oil.

“We are extremely pleased to receive this strong, continued support from the PIF, as we work to solidify our place as the world’s leading EV technology company,” said Peter Rawlinson, CEO and chief technology officer of Lucid Group.

He added: “We continue to invest for the long term in both our technology and our vertically integrated manufacturing capabilities, with PIF’s support a key differentiator. With their support, we remain focused upon accelerating our growth via deliveries, executing key business initiatives with relentless focus upon cost, and launching our game-changing Gravity SUV later this year.”

The investment announcement comes as the global electric vehicle market grapples with a slowdown in demand growth and a price war sparked by Tesla.

Lucid 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 EVs from Mercedes-Benz, BMW, Audi and Porsche, among other brands.

Lucid used its fourth-quarter 2023 financial presentation in February to reassure investors 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.

In September, Lucid opened its first plant outside the US in Saudi Arabia with an initial capacity to produce 5,000 EVs a year.

This came as Kingdom’s government pledged to buy up to 100,000 vehicles from it over 10 years.

“The car is fully built in Arizona … then it gets de-assembled … then the car gets shipped here as a kit, and that kit is then put back together,” Faisal Sultan, who is also Lucid’s global vice-president, told Reuters in December.

Workers in the factory in Jeddah re-attach the battery, put the trim and tires back on and re-test the vehicle, he added.

Lucid is not the only EV player in the Saudi market, as in November 2022 Crown Prince Mohammed bin Salman announced the launch of CEER, a government-owned enterprise that will design, manufacture and sell battery-powered vehicles in Saudi Arabia.

– with additional reporting from Reuters.

ARAB NEWS