Will Saudis’ $1.5B cash infusion help Lucid compete with Tesla?

Analysis

Adam Lucente , Jack Dutton

Aug 11, 2024

A picture taken on July 14, 2022, ahead of a visit by the United States president to Saudi Arabia, shows hostesses in a car manufactured by US electric vehicle maker Lucid Group. — Hostesses at the KSA Green Transition Journey exhibition in Jeddah sit in a car manufactured by the Lucid Group, a US electric vehicle maker, July 14, 2022. — AMER HILABI/AFP via Getty Images

US electric vehicle maker Lucid Motors has received $1.5 billion in new funding from an affiliate of the Saudi Public Investment Fund as it seeks to rival Tesla.

Lucid announced on Monday that the PIF affiliate Ayar plans to purchase $750 million of the EV maker’s preferred stock. Ayar will additionally provide Lucid with a $750 million unsecured delayed draw term loan facility, per the statement from the manufacturer.

Preferred stock is a type of equity that offers relatively more benefits to the shareholder, including as concerns dividend payments. An unsecured loan means that no tangible assets secure the loan, while the delayed draw term allows the borrower to withdraw predefined amounts over a set period of time.

According to reports, Ayar owns about 60% of Lucid, which is based in California.