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Tesla rival Lucid raises $3 billion amid falling sales

Lucid, maker of luxury EVs such as the Air sedan, is raising cash after reporting lower-than-expected revenue for January-March 2023. Image: Lucid

Electric vehicle maker Lucid Group announced plans to raise about $3 billion through a stock offering, in a move seen as stockpiling cash ahead of a likely price war with Tesla.

Almost 66 percent of the fresh funds will come from an existing shareholder, Saudi Arabia's Public Investment Fund, the company said. The remainder will come from a public offering of common stock.

In a statement, the maker of luxury EVs such as the Air sedan and the upcoming Gravity SUV, which sources batteries from Panasonic, said it would use the funds for "general corporate purposes, which may include, among other things, capital expenditures and working capital".

Lucid's revenue for January-March 2023 had missed expectations, coming in at $150 million against analyst estimates of $210 million, as a three-pronged combination of a price war with Tesla, rising interest rates and fears of a recession hurt sales. Announcing the result, the company had lowered its production forecast for 2023, with CEO Peter Rawlinson telling analysts: "I believe that there is a challenge to the entire market right now because of macroeconomics and because of interest rates."

Tesla has cut prices aggressively, with CEO Elon Musk telling analysts "It's better to shift a large number of cars at lower margin and harvest that margin in the future as we perfect autonomy." 

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