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Saudi Arabia’s sovereign wealth fund owns a 60% stake in Lucid Motors, a vehicle startup.
A few months after the company’s IPO, the stake was valued at more than $55 billion, according to Bloomberg.
That figure fell roughly 90% to $5. 4 billion, with Lucid reporting net losses in the millions.
Saudi Arabia’s bet on Lucid Motors, a vehicle startup widely recognized as a competitor to Tesla, has yet to pay off.
Shortly after the electric motor company’s IPO in 2021, Saudi Arabia’s 60% stake in Lucid through the Public Investment Fund (PIF) was valued at more than $55 billion, Bloomberg opinion columnist Chris Bryant wrote.
According to Bryant’s report, that share is now $5. 4 billion, a cut of about 90. 2%.
The sharp drop in Saudi participation coincides with Lucid’s latest quarterly results.
This week, the company reported a net loss of $630. 9 million and posted a gross margin of -207. 74%. This margin means that Lucid’s luxury electric car production rate exceeds the number of cars sold through the company.
In the last quarter, the company reported a net loss of about $764 million, suggesting that the startup loses $500,000 for every car sold, Insider’s Nora Naughton reported.
During an earnings conference call on Tuesday, Sherry House, Lucid’s chief monetary officer, argued that much of the data related to the vehicle’s consistent money intake is “misleading and frankly misunderstood. “
“There are a number of things we’re doing at the corporate point and at the individual vehicle point,” House said, mentioning cost reduction, manufacturing, hard work and overhead.
Despite the sharp drop in the market value of stocks, Saudi Arabia has still lost cash on its investments.
In 2018, the PIF invested $1. 3 billion in Lucid, and it turns out that the Saudis have higher expectations for the EV company.
In September, the country inaugurated its first car production plant, capable of assembling 5,000 electric cars a year. Subsequently, the facility is expected to increase this production to 155,000 people.
A spokesperson for Lucid did not immediately respond to a request for comment sent outside of general business hours.
Read the article on Business Insider