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Just days after Lucid Group (NASDAQ: LCID) started delivering its iconic Air electric vehicles in the EU, the nascent Tesla competitor is now solidifying its footprint in the middle east, with the first batch of EV deliveries taking place in Saudi Arabia over the past few hours.
— أيمن باجابر (@SaudiEV_) January 1, 2023
As per a tweet by the Twitter account @SaudiEV, one of the first deliveries of the Air EV took place on the 01st of January 2023 in Riyadh, the capital city of Saudi Arabia. Of course, this development comes just days after deliveries of the Lucid Air Dream Edition electric vehicle commenced in Germany and the Netherlands.
Lucid Group’s unique 900-volt-plus electrical architecture allows for efficient charging of its EVs. For instance, when paired with a 300-plus kW DC fast charger, the Lucid Air Grand Touring edition can add a whopping 400 km of range in just 15 minutes.
Toward the end of December 2022, Lucid Group was able to decisively address the concerns around a possible liquidity crunch that the company was widely predicted to face in 2023. First, the company completed its at-the-market offering announced back in November, raising around $600 million in the process by selling 56.2 million shares. Second, Lucid Group announced that it was raising approximately $915 million by selling some of its shares to the Ayar Third Investment Company, an affiliate of the Saudi PIF, via a private placement of shares. In total, the company has now gained a whopping $1.515 billion in fresh liquidity to bolster its cash position, which stood at $3.85 billion at the end of Q3 2022 and consisted of cash, cash equivalents, and investments.
With a Total Addressable Market (TAM) of just around 15 percent in the US, some analysts have remained skeptical of Lucid Group’s financial sustainability prospects. After all, the company is currently burning around $1 billion in cash every quarter. Without the recent capital raising exercise, the company’s cash position would have declined to an estimated $2.85 billion by the end of December 2022. However, given the infusion of fresh liquidity, the company has likely ended the fourth quarter of 2022 with a cash position of $4.365 billion – more than enough to cover the entire FY 2023.
Looking ahead, 2023 will see the reservations for the Lucid Gravity SUV open up, with deliveries expected to commence in 2024. As a refresher, Lucid Group’s AMP-1 facility in Casa Grande, Arizona, currently has a production capacity of 34,000 units per annum. The company is adding a second assembly line at the facility to handle the production of the Lucid Gravity SUV. Once the upgrade is complete, the facility’s annual production capacity will increase to 90,000 vehicles per year. Separately, Saudi Arabia recently awarded Lucid Group around $3 billion in incentives to establish a 155,000-units-per-year production facility in the Kingdom. The Saudis have also signed an agreement to purchase up to 100,000 electric vehicles from the company over the next ten years.