Lucid Group said on Monday its largest shareholder, Saudi Arabia’s Public Investment Fund, will inject up to 1.5 billion dollars in cash, as the electric vehicle (EV) maker looks to ramp up production of a new SUV.
The automaker’s shares jumped about 6% in extended trading after closing down 3.9% in the regular session.
The deal comes just ahead of Lucid’s planned production of its much-awaited Gravity SUV later this year and keeps the EV maker sufficiently funded till the fourth quarter of 2025.
Lucid will use the funds for tooling to produce the Gravity SUV and to build its factory in Saudi Arabia, with an annual capacity of 150,000 units per year, among other investments, CEO Peter Rawlinson told Reuters.
Ayar Third Investment has agreed to buy 750 million dollars 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 1.5 billion dollars helps to solidify the relationship between PIF and Lucid further. There was some investor concern out there that should the PIF become frustrated with the company that they wouldn’t provide any additional commitments,” said Andres Sheppard, senior equity analyst at Cantor Fitzgerald.
The PIF’s investment has grown to a total of about eight billion dollars, he adds.
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 sales of its luxury electric sedans during the April-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 gasoline-electric hybrid cars.
Revenue for the second quarter was 200.6 million dollars, compared with analysts’ estimate of 192.1 million dollars, according to LSEG data.
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