LCID Stock Alert: Lucid Motors Sees More Fundraising Is 'Inevitable'

Shares of Lucid (NASDAQ:LCID) stock are in the spotlight after the Financial Times caught up with CEO Peter Rawlinson at the Geneva Motor Show. During the conversation, Rawlinson admitted that the electric vehicle (EV) company would need to raise additional capital, saying: “It’s inevitable we need to raise in the future, it’s just a question of when.”

Saudi Arabia’s Public Investment Fund (PIF) has been a prominent supporter of the company, investing in every single fundraising round that Lucid has enacted. Its current stake in LCID stock totals 1.37 billion shares, equivalent to a 60% ownership stake. Last year, PIF injected $1.8 billion into Lucid. However, Rawlinson knows that PIF’s money fountain won’t flow forever.

“If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous, that is something I will never do, I respect them far too much for that,” said Rawlinson.

LCID Stock: CEO Peter Rawlinson Hints at Future Capital Raise

As of Dec. 31, Lucid had $4.78 billion of cash compared to its cash burn of about $1 billion per quarter. That’s enough money for a little over a year.

Lucid currently has a goal of cutting its costs as it works to ramp up production. That in itself is a difficult task due to the capital-intensive measures of production. Rawlinson noted that the company is planning to reduce variable and overhead costs, which includes “bringing logistics under the same roof to reduce [operating spending], looking at the bill of materials.”

Its net loss for 2023 totaled $2.8 billion, while its production and deliveries were 8,428 and 6,001 vehicles, respectively. During the beginning of the year, Lucid’s production guidance was for between 10,000 and 14,000 vehicles. That was later dropped to “over 10,000” vehicles and then to between 8,000 and 8,500 vehicles. Lucid has guided for the production of 9,000 vehicles in 2024.

The company is hoping that its upcoming vehicle, the Gravity SUV, will be able to boost deliveries. At the same time, the vehicle has a production date of late 2024, so it’s unclear how it will be able to affect 2024 numbers.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.