Lucid Motors (LCID) is in the spotlight as its stock price takes a significant hit following the announcement of a new share sale aimed at financing its upcoming SUV, the Lucid Gravity. The electric vehicle company revealed this capital raise late Wednesday, disclosing plans to issue up to 262 million shares, which is projected to generate approximately $1.67 billion for various corporate initiatives, including working capital and capital expenditures.
In a calculated move, Lucid’s majority stakeholder, the Public Investment Fund affiliate, Ayar Third Investment Company, will also acquire an additional 375 million shares through a private transaction. This strategy is designed to maintain Ayar’s significant 58.8% ownership stake while preventing dilution of shares for other investors.
As this news broke, Lucid’s stock experienced a dramatic plunge, dropping 16% during midday trading. This decline follows closely on the heels of a previous cash investment of around $1.5 billion from Ayar just two months ago, demonstrating the ongoing financial maneuvers at play within the company.
In tandem with the stock issuance announcement, Lucid reported its preliminary financial figures for the third quarter, projecting a loss from operations ranging between $765 million to $790 million, mirroring the $790 million loss experienced in the second quarter. However, third-quarter revenue estimates range from $199 million to $200 million, slightly exceeding analyst expectations of $196.4 million, as compiled by Bloomberg.
Despite these challenges, Lucid remains optimistic about the future, particularly with the anticipated launch of the Gravity SUV. Lucid’s CEO, Peter Rawlinson, has emphasized the substantial market potential for the Gravity, suggesting that the total addressable market for this model is six times larger than that of the Lucid Air sedan. With plans to ramp up production to 90,000 units annually at its Arizona facility, the Gravity SUV is poised to play a pivotal role in the company’s growth strategy.
However, the path to success hinges on Lucid’s ability to achieve efficient manufacturing and cost-effective production for the Gravity SUV, which is set to debut at a starting price around $80,000. This price point places the Gravity at the threshold for eligibility under the federal EV tax credit, potentially enhancing its appeal in a competitive market.
As the auto industry shifts towards electric vehicles, investors are keenly observing Lucid’s moves, especially in light of recent updates regarding vehicle deliveries. Although the company reported delivering 2,781 vehicles in the last quarter—surpassing Bloomberg’s projections—production figures fell short of expectations, with only 1,805 cars manufactured.
This evolving narrative of Lucid Motors reflects the tumultuous environment surrounding electric vehicle manufacturers, where rapidly changing market dynamics and strategic finance decisions can lead to significant fluctuations in stock performance. The focus now turns to whether Lucid can leverage the anticipated success of the Gravity SUV to stabilize its financial position and regain investor confidence. As the company navigates this critical juncture, the stakes remain high for both Lucid and its shareholders in the competitive landscape of electric mobility.