Alwaleed stake lifts confidence in struggling Lucid

Saudi billionaire Prince Alwaleed bin Talal has acquired a 5 per cent stake in Lucid Group, investing about $129.5 million as the electric vehicle maker battles heavy losses, weak demand and concerns over its funding needs.

A regulatory disclosure showed that Prince Alwaleed beneficially owns roughly 19.5 million Lucid shares. The investment is separate from the controlling interest held by Saudi Arabia’s Public Investment Fund, which has supplied billions of dollars in capital and credit facilities to the California-based manufacturer.

Lucid shares jumped more than 21 per cent after the holding was disclosed, closing at $7.90 on Tuesday after touching $8.50 during the session. The stock subsequently gave up part of the gain in extended trading, underlining the market’s continued caution over the company’s financial position.

The purchase represents a significant personal vote of confidence from one of the kingdom’s most prominent investors. Prince Alwaleed is the founder and chairman of Kingdom Holding Company, whose portfolio has included stakes in global technology, hospitality, financial services and media businesses.

The deal also deepens the Saudi investment presence around Lucid. The Public Investment Fund, through its affiliate Ayar Third Investment Company, remains the company’s majority shareholder with a holding of about 57 per cent. It has backed Lucid since 2018 and played a central role in the carmaker’s 2021 stock market listing.

Lucid has received more than $8.5 billion in investments and credit support from the fund since going public. In April, Ayar agreed to buy $550 million of preferred stock as part of a wider financing package that also included a $200 million equity investment by Uber.

The latest disclosure emerged after an exceptionally volatile period for Lucid’s shares. The stock plunged 57 per cent in a single session this month after speculation circulated that advisers had recommended a bankruptcy filing. Lucid rejected the claims as “completely false”, although the company has engaged restructuring specialist AlixPartners to improve operations and execution.

Lucid has maintained that it possesses sufficient liquidity to continue its business plans. It ended the first quarter with about $3.2 billion in available liquidity, but its cash consumption and continuing losses have kept financing risks at the centre of investor attention.

The company recorded revenue of $282.5 million in the first quarter, an increase of 20 per cent from a year earlier. It produced 5,500 vehicles and delivered 3,093, with deliveries affected during February by a supplier problem that interrupted the rollout of its Gravity sport utility vehicle.

Second-quarter production reached 4,774 vehicles, while deliveries rose to 3,953, up about 19 per cent from the same period last year. The delivery total nevertheless fell below market expectations of roughly 4,600 vehicles, raising questions about demand for the Gravity despite the introduction of a lower-priced version starting at $79,900.

Lucid’s losses remain substantial. The company reported net losses of about $2.7 billion in both 2024 and 2025, while adjusted free cash flow was negative by approximately $1.4 billion during the first three months of 2026. Analysts have estimated that it may need another $2 billion of external capital over the coming year and about $4 billion by 2030.

Management has started a broad restructuring under chief executive Silvio Napoli, who took charge in June. Lucid has simplified its leadership structure, reduced the number of executives reporting directly to the chief executive and appointed new leaders across finance, technology, digital operations and corporate transformation.

The carmaker has also announced workforce reductions as it seeks to contain expenses. It disclosed an 18 per cent cut in its workforce in June after a 12 per cent reduction earlier in the year, placing greater pressure on management to increase output without weakening product development or customer service.

Lucid’s strategic importance extends beyond its financial performance. The company operates a manufacturing complex in Arizona and opened Saudi Arabia’s first car production facility in King Abdullah Economic City in 2023. The Saudi plant initially assembles vehicles shipped in partially completed form from the United States and is intended to develop towards an annual capacity of 150,000 vehicles.