Lucid adds $1.75 billion to a Saudi credit line as cost of revenue still tops sales

Lucid Group (Nasdaq: LCID) said on Monday, November 9, that its credit facility with Saudi Arabia's Public Investment Fund was increased by $1.75 billion, as the electric-vehicle maker reported third-quarter revenue of $350 million, according to its earnings release.

Revenue of $350 million, cost of revenue of $609 million

Lucid reported third-quarter revenue of $350 million, up 4% from a year earlier, in what it described as a US battery-electric-vehicle market down 41% over the same period, citing S&P Mobility. The quarterly report shows cost of revenue of $608.6 million for the quarter, $258.3 million more than revenue (computed). A year earlier, cost of revenue exceeded revenue by $333.6 million (computed).

The company said gross profit margin "significantly improved." Free cash flow consumption fell 30% from the second quarter to $1.04 billion, and the net loss was $830.9 million, against $978.4 million a year earlier.

Chief Executive Officer Silvio Napoli said in the release: "Our transformation is beginning to show progress." Chief Financial Officer Alexander De Bock attributed the lower cash use to an operating reset announced with second-quarter results that aligns manufacturing capacity with demand, reduces inventory and lowers operating expenses.

One shareholder group is customer, lender and owner

The credit line is the delayed draw term loan (DDTL) facility with the Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund. Lucid's filing says PIF is an affiliate of Ayar Third Investment Company, the controlling stockholder. On November 5, Lucid signed an amendment raising the sum of drawn loans and undrawn commitments to about $4.23 billion, which left about $2.13 billion available on the filing date.

The filing lists earlier draws: $500.0 million in April, $800.0 million in July, $400.0 million in August and $400.0 million in October 2026. The loan is also a cost: interest expense was $69.9 million in the quarter, of which $45.0 million went to a related party, about 64% (computed).

The group also buys cars. Revenue from a related party was $79.4 million in the quarter, about 22.7% of the total (computed), and 82.2% of accounts receivable on September 30 came from the Government of Saudi Arabia under an EV purchase agreement. The filing describes the government as a related party of PIF.

Liquidity the company says reaches into late 2027

Lucid ended September with $2.0 billion in total liquidity, or $3.75 billion pro forma for the new $1.75 billion. The company said that level should fund operations and key investments into the fourth quarter of 2027, bridging the period through the start of production of its midsize vehicle.

The release gives the dates ahead. Midsize production remains planned for the second half of 2027, with reveal and production dates to be announced in the first quarter of 2027. The company's AMP-2 plant in Saudi Arabia is expected to be inaugurated in early 2027, and Lucid plans to give its mid-term plan and targets early next year. Of a $1.4 billion cash flow improvement plan, Lucid said it had achieved $0.8 billion of savings year to date.

We would watch who pays for the cars, not only who lends for them

Our reading is that the quarter shows a company getting cheaper to run while still depending on one shareholder group at three points: the loan, the interest it pays and a large part of its sales. The $0.8 billion saved against a $1.4 billion plan is the strongest evidence in the report, because it comes from Lucid's own spending.

The opportunity is that a lender with a stake in the outcome keeps the midsize launch funded. The threat is concentration: if cost of revenue stays well above revenue into 2027, each new commitment adds to what must be repaid. We expect the next test to be the first-quarter reveal and production dates, and we would change our view if revenue from buyers outside the Saudi group grows faster than the related-party share.

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