Less than a month after Lucid’s CEO said the electric car start-up must not rely on the “bottomless wealth” of Saudi Arabia, its biggest backer, the company is raising capital from an affiliate of the kingdom’s Public Investment Fund (PIF).

Shares in Lucid jumped 8% on the news that Ayar Third Investment Co. will buy $1 billion worth of stock amid lower-than-expected demand for luxury EVs. 

The PIF, which has a 60% stake in Lucid, opened a factory in the kingdom last year and has poured billions into the California company as it looks to become a significant regional manufacturer.

Saudi Arabia expects 30% of car sales to be EVs by 2030, but faces consumer hurdles since the price of gas in the kingdom is subsidized and less than 1% of current passenger car sales are electric. 

When the new Lucid plant opened last September, outside the western port city of Jeddah, the initial plan called for assembling 5,000 EVs a year with an eventual target of an annual 155,000 vehicles exported from the kingdom.

Such output would be a major leap for Lucid, which expects to make 9,000 cars in 2024. By comparison, Elon Musk’s Tesla sent almost 1.4 million cars off its assembly lines in the U.S., Germany and China in 2022.