Lucid to raise $3bn through stock offering, with majority coming from Saudi Arabia's PIF

The sovereign wealth fund, which owns about 60% of the electric car maker, will buy 265 million shares for $1.8bn

Workers assemble electric vehicles at a Lucid Motors plant in Casa Grande, Arizona. Reuters

Electric vehicle maker Lucid Group plans to raise about $3 billion through a stock offering, with the majority of that coming from its current investor, Saudi Arabia's sovereign wealth fund, the Public Investment Fund.

The PIF, which owns about 60.5 per cent of Lucid, has agreed to purchase more than 265 million shares of the car maker's common stock in a private placement for approximately $1.8 billion, Lucid said in a statement.

The private placement is expected to close on June 26 and is subject to the completion of the public offering and customary closing conditions.

Lucid will offer also more than 173.5 million shares of its common stock as part of the offering.

The company's shares were down 8.76 per cent during after market hours at $7.06 a share, compared with Wednesday's close of $7.76.

“Lucid intends to use the net proceeds from the public offering, as well as from the private placement by its majority stockholder, for general corporate purposes, which may include, among other things, capital expenditures and working capital,” the company said.

The California-based company's shares are 60 per cent lower on an annual basis. For all of 2022, its stock price plunged 84 per cent, worse than Tesla's 70 per cent plunge amid chief executive Elon Musk's contentious takeover of Twitter.

The company had said last year that it planned to raise additional investment as EV makers struggle with staggering raw material and production costs.

“The underwriter may offer the shares of common stock from time to time for sale in one or more transactions to purchasers directly, through agents or through brokers in brokerage transactions on [the] Nasdaq, in the over-the-counter market, through negotiated transactions or in a combination of such methods, or otherwise at a fixed price or prices, which may be changed,” Lucid said.

Global electric car sales are set to surge by 35 per cent this year, helped by government subsidies and the tightening of carbon dioxide emissions standards, the International Energy Agency said in April.

Electric car sales are projected to hit 14 million in 2023, from 10 million last year.

This means the share of electric cars in the overall market will rise to 18 per cent this year, from 14 per cent in 2022, the agency said.

“Electric vehicles are one of the driving forces in the new global energy economy that is rapidly emerging – and they are bringing about a historic transformation of the car manufacturing industry worldwide,” said the agency's executive director, Fatih Birol.

The PIF bought into Lucid in 2018, investing $1 billion in the Tesla rival. In February 2021, the PIF, US investment firm BlackRock and others poured an additional $2.5 billion into Lucid.

Last year, Lucid chairman Andrew Liveris said the company planned to build a factory in Saudi Arabia by 2025 or 2026.

“Now that we are successfully producing and selling cars in the US, our attention is turning to this factory here,” he said at that time.

The factory aims to produce 155,000 cars a year.

Lucid plans a phased global expansion with Saudi Arabia – the Arab world’s largest economy. Bloomberg

Peter Rawlinson, chief technology officer for Lucid Motors Inc.

Lucid was founded in 2007 under the name Atieva and was initially focused on building EV batteries.

In 2016, it rebranded as Lucid Motors, moved away from being a supplier and pivoted towards making a rival luxury sedan to Tesla.

In 2018, the PIF invested more than $1 billion (Dh3.67bn) in Lucid for a majority stake in the company and to help accelerate the manufacturing of its first EV.

Lucid aims to produce up to 8,000 units of Air from its Arizona facility next year and then increase that to 25,000 and 34,000 in 2022 and 2023, respectively.

Other investors of Lucid include Tokyo-based Mitsui and California’s venture capitalist Venrock.

The company claims Air will be the fastest-charging EV in the market, with a charging speed of more than 32 kilometres per minute, under controlled conditions.