Shares of Lucid Motors fell to a new all-time low of $9.53 in the first minutes of Tuesday’s trading session, sending the electric vehicle maker’s market capitalization to below $3.10 billion.
The fresh low comes as Cantor Fitzgerald released a research note following direct conversations with the Public Investment Fund, Saudi Arabia’s sovereign wealth fund and Lucid‘s backer.
“Last week, we held direct conversations with the Public Investment Fund regarding their partnership with Lucid,” Cantor Fitzgerald said in the research note obtained by EV.
The firm has reaffirmed its $21 price target on the stock, implying an upside potential of more than 110%.
PIF, one of the largest wealth managers in the world, holds a stake of more than 50% in Lucid and has invested more than $9 billion in the company since 2018.
Cantor’s analysts said in the new note that they came away from those discussions with renewed confidence in the Saudi fund’s long-term commitment.
“Following our conversations, we come away more encouraged, and we believe that the PIF remains committed to Lucid over the long term, which we see as material,” Sheppard wrote.
Saudi Production
Cantor pointed to several factors for PIF’s continued support.
Sheppard cited the fund’s mandate to diversify Saudi Arabia’s economy beyond oil, Lucid‘s upcoming manufacturing facility being built in the Kingdom, and the Saudi government’s contract to purchase up to 100,000 vehicles over 10 years.
The EV maker will begin full production of its EVs in Saudi Arabia by late 2026, around the same time it launches its third model.
However, full production ramp up is expected to be achieved only in 2029 with 150,000 vehicles produced at the company’s second plant.
“Recall that the government of Saudi Arabia is Lucid‘s largest customer and has an agreement to purchase up to 100,000 vehicles — 50,000 up front, plus an option for an additional 50,000 vehicles — over 10 years,” Cantor noted.
The analysts expect the majority of these vehicles to consist of Gravity SUVs and the upcoming midsize model, targeting production start in the second half of this year, meaning the bulk of this agreement will be back-loaded towards later years.
“Historically, investors have wondered about the PIF’s commitment and willingness to continue backing the company financially, which may have affected Lucid‘s valuation, in our opinion,” the analysts wrote.
Q4 Results and Cash Position
The company delivered 5,345 vehicles in the fourth quarter, above Cantor’s estimate of 4,894 and well ahead of 3,099 deliveries in the year-earlier period.
Production reached 8,412 vehicles, surpassing Cantor’s forecast of 8,034 and consensus expectations of 7,537 vehicles.
Cantor noted that Lucid‘s total liquidity currently stands at approximately $5.5 billion.
This includes roughly $3 billion in cash and investments reported in the third quarter, a $274 million asset-backed revolving credit facility, a $193 million Gulf International Bank facility, and a $750 million unsecured delayed draw term loan facility.
Last November, Lucid disclosed that PIF agreed to increase a delayed draw term loan credit facility from $750 million to approximately $2 billion, boosting the company’s total liquidity by nearly $1.3 billion.
The company also raised $962.4 million through a new offering of convertible senior notes.
The firm maintained its Neutral rating and $21 price target on Lucid shares — implying an upside potential of 116%.
