Lucid Group has announced a significant cash injection of up to $1.5 billion from its largest shareholder, Saudi Arabia’s Public Investment Fund (PIF). This funding comes at a critical time as the electric vehicle (EV) maker prepares to ramp up production of its highly anticipated Gravity SUV.

The announcement, made on Monday, saw Lucid’s shares rise by about 6% in extended trading, despite a 3.9% drop during the regular session. The funding is expected to keep Lucid financially secure until the fourth quarter of 2025, coinciding with the planned rollout of the Gravity SUV later this year.

Lucid plans to use the new funds to advance its production capabilities for the Gravity SUV and to support the construction of its manufacturing facility in Saudi Arabia, which aims for an annual capacity of 150,000 vehicles. CEO Peter Rawlinson shared these plans with Reuters, highlighting the strategic importance of this investment for the company’s future growth.

The deal involves Ayar Third Investment, a PIF affiliate, purchasing $750 million worth of convertible preferred stock and extending an additional $750 million as a credit line. This marks the second significant investment from the PIF affiliate this year, further solidifying the relationship between Lucid and the PIF. Andres Sheppard, a senior equity analyst at Cantor Fitzgerald, noted that this investment alleviates investor concerns about the PIF’s commitment to Lucid, bringing the total PIF investment in the company to approximately $8 billion and increasing its stake to about 60%.

In addition to the funding news, Lucid reported better-than-expected second-quarter revenue, driven by price cuts on its luxury electric sedans. The company generated $200.6 million in revenue, surpassing analysts’ expectations of $192.1 million. Lucid had reduced prices for its flagship Air sedans by up to 10% in February to boost sales amid growing consumer preference for more budget-friendly gasoline-electric hybrid vehicles.

Lucid produced 3,838 vehicles in the first half of the year and reaffirmed its target of manufacturing 9,000 units by year-end. The company delivered a record 2,394 vehicles in the second quarter, exceeding market expectations.

Looking ahead, Lucid plans to diversify its product lineup with a more affordable mid-size car set to debut in late 2026. Despite reporting an adjusted loss of 29 cents per share for the second quarter, slightly wider than analysts’ estimate of a 27-cent loss, Lucid remains financially robust, ending the quarter with $1.35 billion in cash and cash equivalents. The company also revised its capital expenditure forecast for 2024, reducing it by $200 million from the previous outlook of $1.5 billion.

This infusion of capital from the PIF not only strengthens Lucid’s financial position but also underscores the strategic alliance between the two entities, paving the way for the successful launch of the Gravity SUV and beyond.