Lucid Motors has received substantial financial backing from Saudi Arabia's Public Investment Fund (PIF), which holds over half of Lucid's equity and has invested more than $9 billion since 2018. The PIF recently injected another $750 million to support Lucid's restructuring efforts, with additional commitments including a $1.5 billion investment in August 2024, combining a private placement and a loan facility. This ongoing support is crucial as Lucid continues to burn through cash, reporting a $643 million loss in Q2 2024 despite record sales for its luxury sedans, which generated $200 million in revenue.
Despite the frequent capital raises, Lucid's sales have not met initial projections. The company missed its Q2 delivery estimates, and its full-year production guidance of 25,000 to 27,000 units is a fraction of its 2021 forecasts. Analysts, such as Cantor Fitzgerald and Canaccord, have cut their price targets from $14 to $8 per share, and the stock is down approximately 38% year-to-date, sitting about 99% below its early 2021 peak.
The Saudi government's investment is framed within its Vision 2030 plan to diversify its economy beyond oil. This commitment includes establishing Lucid's Advanced Manufacturing Plant 2 (AMP-2) in King Abdullah Economic City, Saudi Arabia, which is expected to have an annual capacity of 155,000 vehicles by 2029. The Saudi government has also committed to purchasing up to 100,000 Lucid vehicles over a decade, with 50,000 already contracted. Production of the upcoming mid-size EV, the Lucid Cosmos, is expected to begin in Saudi Arabia six to twelve months before manufacturing starts in Arizona.
Lucid's financial situation remains precarious, with a negative free cash flow of $1.44 billion in Q1 and projected losses of $6.7 billion through 2028, with no positive free cash flow anticipated until 2030 by Wall Street analysts. The company has undertaken cost-cutting measures, including multiple layoffs, and recently overhauled its C-suite. The new funding is also intended to support the launch of its first electric SUV, Gravity, which is slated for production by the end of 2024.
