Lucid's $300M Deal with Uber: A Buying Opportunity?

Lucid Motors has signed a deal with Uber to provide at least 20,000 electric vehicles equipped with self-driving hardware over six years, including a $300 million equity investment from Uber. The deal is expected to start production by the end of 2026. Lucid's shares initially surged but soon fell back. The deal is seen as a buying opportunity for investors due to its potential benefits, including increased vehicle sales and a welcome addition to Lucid's cash hoard.

Lucid Motors has recently announced a significant deal with Uber, marking a pivotal moment for both companies. The agreement involves Lucid providing at least 20,000 electric vehicles (EVs) equipped with self-driving hardware to Uber over the next six years. This deal, which includes a $300 million equity investment from Uber, has sparked interest among investors but has also led to a swift correction in Lucid's stock price.

Key Details of the Deal

On July 18, 2025, Lucid Motors (NASDAQ: LCID) and Uber Technologies (NYSE: UBER) partnered with self-driving developer Nuro to supply at least 20,000 Gravity SUVs equipped with Nuro's Level 4 self-driving systems. These vehicles will be used in Uber's planned luxury robotaxi service. Production of the self-driving Gravity SUVs is expected to commence by the end of 2026, with deliveries spanning over the following six years [1].

Potential Benefits for Lucid

The deal presents several potential benefits for Lucid:

1. Increased Vehicle Sales: Selling 20,000 vehicles over six years is a substantial order for a company that delivered just 10,241 vehicles in 2024 [1].
2. Market Exposure: Placing the Gravity SUV in Uber's upscale robotaxi service could introduce Lucid's technology to a wider range of affluent customers, potentially driving sales [1].
3. Cash Injection: The $300 million equity investment from Uber will bolster Lucid's cash hoard, which as of the end of the second quarter, totaled $3.6 billion (plus another roughly $1.3 billion in available credit lines) [1].

Stock Market Reaction

Lucid's shares initially surged following the announcement but quickly fell back. The key concern for investors is Lucid's cash situation. Like any automaker, Lucid uses a lot of cash but does not yet generate enough to cover its expenses. Developing new models, such as the "midsize" vehicles Lucid plans to introduce by the end of 2026, requires significant cash investments [1].

Investment Considerations

While the deal looks promising for Lucid, investors should consider the cash concerns and the company's ability to scale production and sales. Lucid's largest investor, Saudi Arabia's Public Investment Fund (PIF), owns about 60% of the company and has deep pockets. However, no investor will indefinitely throw good money after bad. If PIF ensures funding until the new midsize models scale up, Lucid's stock might be a cautious buy at current levels [1].

Conclusion

The partnership between Lucid Motors and Uber represents a strategic move for both companies. While the deal offers potential benefits for Lucid, such as increased sales and a cash injection, investors should remain cautious due to Lucid's ongoing cash concerns. As production of the self-driving Gravity SUVs begins by the end of 2026, the success of these vehicles will be critical in determining Lucid's future.

References

[1] https://finance.yahoo.com/news/lucids-300-million-deal-uber-140300135.html
[2] https://eletric-vehicles.com/lucid/lucid-and-uber-robotaxi-partner-nuro-secures-203m-in-new-funding-round/
[3] https://www.nasdaq.com/articles/lucids-300-million-deal-uber-buying-opportunity-investors