Lucid Group (LCID) has announced the pricing of a new offering of senior notes totaling $875 million in a private sale aimed at institutional investors. The proceeds from this offering will primarily be used to pay down existing debt as the company prepares for its next phase of growth.
Despite the announcement, Lucid Group’s stock experienced a dip, falling over 6% following the news of the debt offering. This decline comes after a year in which the shares have already dropped 48%, bringing them close to an all-time low around $15.85 each.
In the third quarter, Lucid achieved a significant milestone by delivering just over 4,000 vehicles, marking its seventh consecutive quarter of record deliveries. The total deliveries for the year through September have reached nearly 10,500, surpassing the approximately 10,200 vehicles delivered in the entirety of 2023. This suggests an upward trajectory in operational performance and demand for Lucid’s offerings.
The company’s financial situation remains a mixture of promise and challenge. Although Lucid ended the third quarter with $1.6 billion in cash and equivalents—sufficient funding to cover operations through the first half of 2027—it also reported a substantial debt burden exceeding $2 billion. This financial backdrop underscores the necessity for strategic financing activities, including the recently highlighted $875 million convertible senior note offering due in 2031.
Additionally, Lucid has secured an agreement with Saudi Arabia’s Public Investment Fund (PIF), its largest shareholder, to expand a delayed draw term loan credit facility from $750 million to approximately $2 billion. With this inclusion and other undrawn credit lines, Lucid’s total liquidity now stands at about $5.5 billion, a step up from the $4.2 billion reported in the previous quarter.
Looking ahead, Lucid is focused on ramping up production for its Gravity SUV and anticipates launching a new midsize platform by late 2026. The company plans to utilize approximately $752.2 million from the newly raised funds to repurchase some outstanding convertible senior notes due in 2026, while the remainder will serve various corporate purposes.
As Lucid moves forward, the commitment to expanding its product lineup and enhancing liquidity positions it for potential growth, despite short-term stock fluctuations. The EV market remains dynamic, and Lucid’s ongoing efforts in production and innovation could pave the way for recovery in investor confidence.