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Saudi Arabia invests an additional $1 billion in electric car company Lucid.

TraderKnows
TraderKnows
03-26

Lucid is a company that pivoted from being a supplier in the electric vehicle industry to manufacturing pure electric vehicles. In 2020, it emerged as a competitor to Tesla, but its development has been declining ever since.

On March 25th, the well-known luxury electric vehicle company Lucid announced that it had received a $1 billion investment from a subsidiary under Saudi Arabia's Public Investment Fund (PIF). Following this announcement, the company's stock price immediately surged, and as per the related documents, this investment will be converted into approximately 280 million shares.

Lucid, based in California, USA, entered the electric vehicle industry in 2020 with their first electric vehicle, the Lucid Air, establishing themselves in the high-end pure electric vehicle market. However, due to a variety of factors, they have been unable to turn a profit and stand out from Tesla and other traditional car manufacturers.

Lucid was originally founded as Atieva by former Tesla Vice President and board member Peter Rawlinson, along with former Oracle executive Sam Weng. Many of its senior executives in hardware engineering, supply chain, and sales also came from Tesla. Initially, the company focused on the research and development of battery systems and powertrain for electric vehicles before transitioning to manufacturing electric vehicles, hence it's often compared to Tesla.

However, their path has not been as smooth as Tesla's. After shifting focus to manufacturing electric vehicles, constraints such as production volume and popularity have prevented them from becoming profitable, with losses increasing year by year. In this situation, the investment from Saudi has been a lifeline. The Saudi Public Investment Fund has already invested several billion dollars in the company, holding more than 60% of its shares.

According to data provided by Lucid, the company's production is expected to rise to 9,500 vehicles this year and aims to increase to 20,000 vehicles by 2025. However, whether the actual production can keep up and whether all the vehicles can be sold remains uncertain.

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