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Lucid electrical automotive
Lucid Group, Inc. (Nasdaq: LCID) manufacturers itself as a frontrunner in sustainable mobility, even collaborating within the United Nations Global Compact, a voluntary initiative selling company duty in human rights, labor, environmental practices, and anti-corruption.
“The UN Global Compact challenges corporations to conduct enterprise responsibly by aligning their operations and techniques with the UN’s Ten Principles.”
— Lucidmotors.com, April 19, 2023 information launch
But whereas Lucid talks about sustainability, its monetary well being is something however secure. Without monetary sustainability, even probably the most promising environmental initiatives can collapse. Producing fewer than 10,000 vehicles per yr, Lucid has burned by means of billions in losses. Yet, its greatest backer—the Saudi Public Investment Fund (PIF), which owns 59% of the corporate—continues to pump cash into the struggling EV maker.
A Lucid Sedan, 2025
The Public Investment Fund is the sovereign wealth fund of Saudi Arabia. It is among the many largest sovereign wealth funds on the planet with complete estimated property of US$930 billion. Is this a real effort to construct a sustainable American automotive firm, or only a self-importance undertaking for the oil-rich kingdom?
The Saudi PIF has positioned itself as a serious investor in renewable power and electric vehicles, however its observe report raises questions. The fund has spent closely on flashy, high-tech tasks, typically with little regard for long-term profitability. Lucid is one in all its most high-profile EV investments, but the corporate has did not scale manufacturing to a stage that justifies its monumental prices. The PIF’s willingness to maintain writing checks means that Lucid’s survival has much less to do with monetary success and extra to do with Saudi Arabia’s broader ambitions within the world power transition.
Peter Rawlinson CEO of Lucid
Meanwhile, Lucid’s board hasn’t been shy about rewarding its executives. In 2021, the corporate accredited a $565 million compensation package deal for CEO Peter Rawlinson, at a time when the corporate had barely generated income. That meant awarding him practically $1 in stock-based pay for each $1 in projected income—a mannequin that doesn’t work except explosive development follows. It didn’t. Lucid’s inventory has since plummeted, erasing billions in market worth, and now, in 2025, Rawlinson is strolling away—although not empty-handed. He’ll obtain $120,000 monthly for 2 years as a part of a consulting contract, plus $2 million in restricted inventory items.
Graph 1 exhibits Rawlinson’s pay for the previous 5 years peaking at $565 million in 2021 and adjusting to a
extra normalize $6.8 million in 2023 a yr and alter earlier than his departure from the struggling
automaker.
While Lucid struggles to outlive, the Saudi Fund has remained silent on whether or not it’s going to hold bankrolling the corporate indefinitely. The financials inform a grim story: Lucid has misplaced $10 billion whereas producing simply $2 billion in automotive gross sales over the previous 5 years. This will not be a sustainable enterprise mannequin, and if the PIF decides to chop its losses, Lucid could not have the means to proceed.
Graph 2 exhibits Lucid’s income rising from $0 in 2020 to negligible in 2021 when Rawlinson was
awarded a $1.00 in inventory worth for future $1.00 income efficiency.
Graph 3 exhibits Lucid’s dropping streak. Losing $10 billion whereas promoting $2 billion price of vehicles will not be an
clearly sustainable technique. Rewarding, or attempting to reward the CEO with over $500 million appears
equally unsustainable. Rawlinson’s departure reinforces the purpose.
The greater query is whether or not the Saudi Fund is severe about making a thriving EV trade or just utilizing investments like Lucid for geopolitical leverage and reputation-building. With its deep ties to the fossil gas trade, Saudi Arabia’s dedication to sustainability stays an open query. And if Lucid fails, will probably be a lesson in how throwing cash at an issue doesn’t at all times result in actual change.
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Cooper additionally gives a boutique funding advisory. Contact him at [email protected]
