American electric vehicle (EV) maker Lucid Group announced on Monday that it had secured up to $US1.5 billion in new funding from its largest shareholder, the Ayar Third Investment Company, which is part of the sovereign wealth fund of Saudi Arabia.
Ayar Third Investment has agreed to buy $US750 million (around $A1.15 billion) worth of convertible preferred stock and provide a further $US740 million as a credit line. This marks the second investment from Saudi Arabia’s Public Investment Fund this year.
Lucid said only that the funding will be used “for general corporate purposes, which may include, among other things, capital expenditures and working capital” – but reports suggest that some of the funds will be used for tooling to produce the Gravity SUV and to build its factory in Saudi Arabia capable of manufacturing 150,000 vehicles per year.
The funding also serves to put investor concerns to rest, with Lucid shares jumping around 6 per cent in extended trading despite closing down 3.9 per cent in regular trading.
“The $1.5 billion helps to solidify the relationship between PIF and Lucid further,” Andres Sheppard, senior equity analyst at Cantor Fitzgerald, told Reuters.
“There was some investor concern out there that should the PIF become frustrated with the company that they wouldn’t provide any additional commitments.”
Sheppard added that the PIF’s investment in Lucid has now increased to around $US8 billion, or around $A12 billion, with a stake of around 60 per cent in the company.
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.