Lucid Group is cutting costs almost everywhere else in its business this year, but there is one project the company has explicitly refused to touch: turning its Saudi Arabian manufacturing site into a genuine, ground-up factory capable of building complete vehicles rather than simply assembling kits shipped over from Arizona. In an industry where EV startups have spent 2026 shelving expansion plans and slashing capital spending just to survive, protecting a factory buildout of this scale while cutting nearly everywhere else counts as a real bet.
Cutting Everywhere Except One Place
According to Lucid’s own second-quarter 2026 earnings release, the company identified $1.4 billion in planned cash flow improvements for the year. CEO Silvio Napoli described the strategy plainly in the release: “We are going back to basics, with a clear focus on cash, customers, and culture.” But Napoli also named four “must-win priorities” the company is protecting even as it cuts elsewhere, including AMP-2, the Saudi Arabia facility.
What “Entirely New Factory” Actually Means Here
AMP-2, located in King Abdullah Economic City near Jeddah, has existed in some form since it opened in 2023, but it began life handling only semi-knocked-down assembly of vehicles largely built at Lucid’s Arizona plant. Lucid’s own release describes the site as having “transitioned from construction to industrialization,” with manufacturing systems across stamping, body, paint, and final assembly now being installed and commissioned, the work required to turn a kit-assembly operation into a true Complete Build Unit factory capable of producing vehicles from raw materials on-site. That transformation is backed by a financing and incentive package with Saudi partners worth up to $3.4 billion over 15 years, aimed at a peak capacity target of roughly 150,000 vehicles annually.
That is a striking amount of capital commitment for a company posting the kind of results that forced an “operational reset” in the first place. Lucid produced just 4,774 vehicles in the second quarter, a number the company says was intentionally moderated to reduce inventory and preserve cash, and total liquidity stood at $3.0 billion at quarter’s end. Betting a meaningful share of that runway on turning a half-built assembly site into a full-scale factory, while trimming spending on nearly everything else, is the kind of decision that will look either visionary or reckless depending entirely on how quickly AMP-2 actually starts producing complete cars.
Saudi Arabia’s own economic diversification push, part of the kingdom’s broader Vision 2030 strategy to reduce dependence on oil revenue, has made the AMP-2 project as much a matter of national industrial policy as a corporate expansion decision. The financing backing the plant flows in part from Saudi state-linked investment vehicles, giving Lucid a source of capital largely insulated from the swings in U.S. equity markets that have made fundraising harder for other EV startups relying primarily on Wall Street investors.