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, the American electric vehicle manufacturer, has recently secured another $1.5 billion investment from Saudi Arabia’s Public Investment Fund (PIF). This additional funding comes at a crucial time for Lucid, as the company prepares to ramp up production of its luxury electric sedan, the Lucid Air.

The investment from PIF is a vote of confidence in Lucid’s vision and capabilities. The Saudi sovereign wealth fund had previously invested $1.3 billion in Lucid in 2018, and this latest infusion of capital brings the total investment from PIF to $2.8 billion.

This funding will be instrumental in helping Lucid expand its manufacturing facilities in Arizona and bring the Lucid Air to market. The Lucid Air is a high-end electric sedan that promises to deliver industry-leading range and performance. With a starting price of $77,400, the Lucid Air is positioned to compete with luxury electric vehicles from established players like Tesla and Audi.

Lucid has ambitious plans for the future, including expanding its product lineup to include an SUV and other models. The company also aims to establish itself as a leader in sustainable transportation, with a focus on using renewable energy sources and reducing carbon emissions.

The partnership with PIF underscores the growing interest in electric vehicles and sustainable transportation solutions. As the world focuses on reducing greenhouse gas emissions and combating climate change, electric vehicles are seen as a key part of the solution. Lucid’s focus on luxury and performance sets it apart from competitors and positions it for success in the rapidly growing electric vehicle market.

Overall, the additional $1.5 billion investment from Saudi Arabia’s PIF is a significant milestone for Lucid Motors. With this funding, the company is well-positioned to accelerate its growth and establish itself as a major player in the electric vehicle market. The partnership between Lucid and PIF highlights the importance of collaboration and investment in sustainable transportation solutions for the future.