Lucid Group announced on Wednesday it expects to report a larger-than-anticipated loss for the third quarter and revealed plans for a public offering of more than 262 million shares. The announcement sent Lucid’s stock down by 12% in after-hours trading.
In addition to the offering, Saudi Arabia’s Public Investment Fund (PIF), Lucid’s largest shareholder, confirmed it will purchase 374.7 million shares of the company. Despite the new investment, PIF aims to maintain its nearly 59% ownership stake in the electric vehicle (EV) startup.
Lucid plans to use proceeds from the share offering and the private placement by PIF to fund capital expenditures and meet other corporate financial needs. The sovereign wealth fund’s backing highlights the significance of this financial support for Lucid, which is grappling with the challenges faced by struggling EV startups. Earlier this year, PIF pledged up to $1.5 billion through its affiliate, Ayar Third Investment, to aid Lucid in scaling production of its upcoming SUV.
Saudi Arabia has poured billions into Lucid as part of its broader economic strategy to diversify beyond oil dependency. The carmaker expects to report an operating loss between $765 million and $790 million for Q3, above analysts’ forecast of a $751.65 million loss, according to data from LSEG. Lucid is scheduled to release its full third-quarter results on November 7.
Lucid, along with other EV makers like Tesla and Rivian, has been hit by weakening demand in the U.S. as rising interest rates and the availability of cheaper hybrid alternatives challenge the market. In response, EV companies have cut prices and introduced financing incentives to attract customers.
