Lucid Motors’ Woes Run Much Deeper. Saudi Money Alone Won’t Solve Them.

The electric vehicle (EV) industry has been going through turmoil, and barring market leader Tesla (TSLA), no other player has been able to make money in the U.S. market. Legacy automakers, which announced ambitious vehicle electrification plans, have lately been licking their wounds and booking massive losses.

The quantum of losses the Detroit Big 3 have announced is gigantic. Ford (F) announced a $19.5 billion write-down in its EV business in December 2025. General Motors (GM), which had once declared that it wouldn't sell gasoline cars after 2035, has written down $7.6 billion. Stellantis (STLA), meanwhile, leads the pack with a charge of $26.5 billion.

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Startup EV players also continue to struggle, to say the least, and are saddled with continued losses and cash burn. Legacy automakers have the luxury of profitable internal combustion engine (ICE) operations, which offset the EV losses and leave them with billions of dollars in free cash to splurge on dividends and buybacks. 

EV Companies Need Frequent Capital Infusion

Startup EV players have had to resort to frequent capital raises to make up for the perennial cash burn. Earlier this week, Rivian (RIVN) announced a $1.5 billion capital raise. The stock expectedly fell after the announcement. Lucid Group (LCID) has raised capital even more frequently. It is backed by Saudi Arabia's Public Investment Fund (PIF), which first invested $1 billion into the company in 2018.

Incidentally, that was the year when Tesla CEO Elon Musk made his infamous remark about "taking Tesla private." Musk, who became the world's first trillionaire following SpaceX's (SPCX) listing, claimed that the PIF approached him to take the company private and that he was banking on them while asserting "funding secured" for the transaction.

PIF Has Poured Billions of Dollars into Lucid Motors

Meanwhile, the PIF also participated in the private investment in public equity (PIPE) transaction during Lucid's 2021 merger, buying the shares at $15 apiece. It was an aberration from the general convention then as PIPE transactions happened at $10 a share, which was the IPO price of the special purpose acquisition companies (SPACs)—remember those shell companies that "helped" many startups go public? Many of which have since either gone bankrupt or have slipped into oblivion.