Lucid Group plans to offer 262 million additional shares

Electric carmaker Lucid Group is planning to offer more than 262 million shares, sending its shares down 12% in after-market trading on Wednesday.

Saudi Arabia’s Public Investment Fund, the company’s largest shareholder, also announced it would buy 374.7 million shares. The fund expects to retain a stake of about 59% in the company, according to Al Arabiya, citing Reuters.

The fund’s latest investment underscores the importance of this lifeline to Lucid in the race for survival facing electric car companies.

The company intends to use the proceeds from the offering, as well as its private placement from the Public Investment Fund, to fund its capital expenditures and other financing needs.

The Public Investment Fund announced in August that it would inject up to $1.5 billion in cash through its subsidiary, May Third Investment, as Lucid looks to ramp up production of a new sports utility vehicle.

Lucid expects to report a loss from operations in the range of $765 million to $790 million for the quarter ended Sept. 30. That compares with analysts’ average estimate of a loss of $751.65 million, according to data compiled by the London Stock Exchange Group. Demand for electric vehicles in the United States has been slumping due to rising interest rates and the availability of cheaper hybrid alternatives.