Making electric vehicles isn’t cheap—especially for the new crop of startups trying to do battle with Tesla. Lucid, one of those new firms, can breathe a bit easier now after getting a much-needed lifeline from Saudi Arabia’s sovereign wealth fund. 

The EV startup announced on Monday that an affiliate of Saudi Arabia’s Public Investment Fund (Lucid’s majority shareholder) will provide a cash infusion of up to $1.5 billion. That pile of money, Lucid says, should help keep it funded into at least the fourth quarter of next year. 

For the Saudis, backing Lucid is a way to diversify as the global economy moves away from fossil fuels. For Lucid, the PIF’s deep pockets are a huge advantage in the capital-intensive EV business. 

The new funding is critical because Lucid, like fellow startup Rivian, has been burning through hundreds of millions of dollars every quarter. It sells the impressive Air sedan, but not in high enough volumes to cover its enormous costs. Lucid on Monday also reaffirmed its target of making 9,000 Airs this year, only slightly more than 2023. 

Scaling up to the kinds of production volumes that create financial health will take new mass-market models and billions of dollars. That’s where the Gravity, a new three-row SUV, comes in. Lucid hopes that model will bring in a vast new customer base, and this latest investment should help it ramp up production at its Arizona factory over the next year. Production is set to begin by the end of this year. 

Both Lucid and Rivian have raked in large sums that make it a lot more likely that they’ll cross the so-called “valley of death”—the difficult period when the costs of scaling up still far outweigh the revenue generated by selling cars. The same PIF affiliate invested $1 billion into Lucid in March. To cross its own valley, Rivian recently inked a deal with the Volkswagen Group that will bring in $5 billion in the coming years. Making cars isn’t just hard, it’s expensive.

Contact the author: tim.levin@insideevs.com

Lucid⁢ Motors has⁣ secured an⁣ additional⁤ $1.5 billion in funding from Saudi Arabia in a move that further solidifies the electric vehicle company’s financial position and accelerates its plans for global expansion.

The‍ funding, which comes from the Public Investment⁤ Fund (PIF) of Saudi Arabia, demonstrates the kingdom’s ⁣continued‍ commitment to supporting ⁤Lucid‌ in its mission to revolutionize the ⁢automotive industry with its luxury electric vehicles. ⁢This latest lifeline follows a‌ previous $1.3 billion investment from the same source in 2018, ‌underscoring the confidence that Saudi Arabia ⁢has in Lucid’s technology and​ leadership.

Peter Rawlinson, CEO and CTO⁢ of ‍Lucid Motors, expressed his gratitude for the continued support from Saudi Arabia, stating‍ that the ​additional funding will⁣ allow the company to ramp up production​ and‌ bring its groundbreaking vehicles to market faster. With the investment, Lucid ‌plans to expand its manufacturing ‍capabilities at its facility in Arizona, as well⁢ as ​establish a ⁤technology ‍and⁣ engineering‌ center in⁣ the⁢ kingdom of Saudi Arabia.

The news of the⁢ $1.5 billion investment comes at a crucial time ⁢for Lucid⁢ Motors, as the ⁣company prepares ‍to launch its flagship Lucid Air electric‍ sedan‍ later ​this year. The⁤ luxury vehicle‌ has already received rave reviews ⁢for its cutting-edge design, industry-leading range, and​ advanced features, positioning it as‌ a serious competitor to established players in the electric vehicle market.

In addition ⁢to the Lucid Air, the company is also ​developing other electric vehicles, including an ‌SUV that is set to​ enter ⁤production ⁣in 2023. With the​ support of ​Saudi⁣ Arabia, Lucid ‌Motors is well-positioned to ⁣accelerate its growth and⁣ become⁤ a key ‌player in the global ‌electric vehicle market.

The partnership between Lucid Motors and Saudi‌ Arabia reflects a shared vision for a‌ more ⁤sustainable future powered by‌ clean energy. By investing in ⁣innovative companies like Lucid,⁢ Saudi Arabia is not only diversifying ‍its economy but⁢ also supporting the development of cutting-edge ​technologies that will drive​ the transition to a​ low-carbon future.

As the demand for electric vehicles continues⁢ to rise, Lucid Motors stands out as‌ a leader ‌in the ⁢industry, with its focus⁣ on luxury, ​performance, and sustainability. With the latest $1.5 billion lifeline from Saudi Arabia,‍ the company is well-positioned to achieve its ambitious goals‍ and redefine the automotive landscape for years to come.