Lucid also said it was raising over $1 billion, including a new investment of $550 million of convertible preferred stock from Ayar Third Investment Company, an affiliate of Saudi Arabia’s Public Investment Fund, Lucid’s largest shareholder.Lucid on Tuesday named former Schindler top boss Silvio Napoli as its next CEO and said it is raising more than $1 billion as the electric vehicle maker shores up liquidity during a crucial and costly manufacturing ramp-up.
Shares of the company closed down about 5 per cent as some analysts said the fundraise, made up of stock offerings and investments, would do little to ease liquidity pressures and more money would have to be raised at terms that dilute existing shareholders.
Lucid is facing a crucial period as it works to expand its vehicle lineup into lower-cost models and robotaxis in partnership with Uber and autonomous-vehicle firm Nuro.
It has also recently grappled with supply chain disruptions, including a supplier quality issue with second-row seats that hampered deliveries in the first quarter.
Napoli, most recently chairman and CEO of Schindler , is credited with modernizing the Swiss elevator and escalator maker’s global supply chain and overseeing its aggressive expansion into Asian markets.
He will take charge from interim CEO Marc Winterhoff, who will continue as chief operating officer.
Lucid secures new capital
Lucid also said it was raising over $1 billion, including a new investment of $550 million of convertible preferred stock from Ayar Third Investment Company, an affiliate of Saudi Arabia’s Public Investment Fund, Lucid’s largest shareholder.
At the same time, Lucid expanded its credit line to $2.5 billion. Through a common stock offering, Lucid will secure over $291 million in proceeds from underwriter BofA.
“We see this as the potential ‘tip of the iceberg’ with even more dilutive rounds of capital needed,” analysts at BNP Paribas said in a note, adding that the latest raise does not “substantially address Lucid’s liquidity needs”.
The company has tried to cut costs and boost profitability by optimizing supply chains and reducing workforce to stay afloat in an industry that requires heavy amounts of cash burn.
The company also expanded its robotaxi partnership with Uber. The ride-hailing firm will increase its commitment to at least 35,000 Lucid vehicles and invest an additional $200 million in Lucid.
The autonomous vehicle industry represents a new avenue for automakers to bolster operations and tap into a market that analysts say will grow exponentially in the future.
