Lucid Motors’ Latest Move Sends Stock Sliding
The electric vehicle (EV) maker’s announcement of a massive capital raise via a share sale has sent its stock tumbling 16% in midday trade. Lucid Motors (LCID) plans to offer up to 262,446,931 shares, expected to raise around $1.67 billion, which will be used for general corporate purposes, capital expenditures, and working capital.
A Boost Ahead of the Gravity SUV Launch
The California-based company is seeking to extend its runway ahead of the release of its highly anticipated EV SUV, Gravity. With production expected to begin later this year, Lucid hopes to significantly boost sales with this new model. According to CEO Peter Rawlinson, the total addressable market for Gravity is six times that of Lucid Air, and the company plans to have capacity to build 90,000 Gravity SUVs per year at its Arizona plant.
Majority Shareholder Ups Stake
Lucid’s majority shareholder, Public Investment Fund affiliate Ayar Third Investment Company, will purchase an additional 374,717,927 shares via a private placement, maintaining its 58.8% stake without dilution. This move comes just two months after Ayar injected $1.5 billion into Lucid.
Financial Update: Losses Expected
In addition to the capital raise, Lucid filed preliminary third-quarter financial results, anticipating a loss from operations in the range of $765 million to $790 million. Revenue is expected to come in between $199 million and $200 million, beating estimates. The company reported $1.9 billion in cash and equivalents, with total liquidity of $4 billion prior to the capital raise.
Production and Delivery Numbers
Last week, Lucid announced it delivered 2,781 vehicles during the quarter, surpassing Bloomberg estimates. However, its 1,805 cars produced fell short of expectations. The company is banking on the Gravity SUV to rev up sales and drive growth.
The Road Ahead
As Lucid gears up for the Gravity SUV launch, the big question remains: can the company build the vehicle efficiently and keep costs in check? With a starting price of around $80,000 in the US, right at the eligibility threshold for the federal EV tax credit, the stakes are high. Will Lucid be able to deliver on its promises and turn its fortunes around? Only time will tell.
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