Lucid Group, an electric car company that has struggled to ramp up manufacturing, said on Tuesday that it had reached agreements to raise up to $1.5 billion, shoring up its financial position as it works to streamline and expand its production operations.
The company said in a regulatory filing that it planned to sell up to $600 million in new shares through Bank of America, Barclay’s Capital and Citi. It also said it reached an agreement to sell up to $915 million in stock to the sovereign wealth fund of Saudi Arabia, which already owns a majority of Lucid’s stock.
Shares of Lucid were down about 12 percent in after-hours trading on Tuesday following the disclosure of its plans in the securities filing. The company’s stock was trading at just under $12, down from more than $50 last November.
Separately on Tuesday, Lucid said that it had lost $670 million in the third quarter, compared with a loss of $524 million loss in the same period a year earlier. The company said it had significantly increased production in the third quarter.
Revenue rose significantly to $195.5 million, from $97.3 million in the second quarter and just $232,000 in the third quarter of 2021. It delivered 1,398 cars to customers in the third quarter, more than twice as many as in the second quarter.
The fledgling company, based in Newark, Calif., said it produced 2,282 electric cars in the three months that ended in September, more than three times as many as it made in the previous three months. “We’ve made great strides in ramping up our production,” Lucid’s chief executive, Peter Rawlinson, said in an interview. “We are gradually improving things and there’s a real belief we are on the right track here.”
He added that the automaker was on track to hit its revised target of making 6,000 to 7,000 cars this year.
The company said it had taken reservations for 34,000 cars from individuals. Its only model, the Air sedan, has won accolades from car magazines and websites. The car can travel up to 520 miles on a full charge, more than any other electric vehicle on the market. The company said it would begin taking reservations for a second model, the Gravity sport-utility vehicle, early next year.
But Lucid still faces a number of challenges, including increasing production and turning a profit. With the exception of Tesla, most recent automotive start-ups have struggled to mass produce their promising designs and create self-sustaining businesses. Lucid had $3.85 billion in cash and cash equivalents at the end of September.
Saudi Arabia’s government has agreed to buy up to 100,000 cars from Lucid and the company is planning to build a manufacturing facility in that country. It currently makes cars at a factory in Arizona.
This year investors have lost much of their enthusiasm for start-up carmakers, making it harder and more expensive for them to raise financing. Rivian, another electric car company, reports its third-quarter earnings on Wednesday. Rivian’s shares soared to as high as $180 after its initial public offering late last year, but have since fallen sharply. On Tuesday Rivian’s stock closed at under $32 a share.