Lucid Motors, Lucid Group Inc (LCID.O), reported disappointing first-quarter revenue, falling short of Wall Street estimates due to a pricing war that was sparked by Tesla Inc (TSLA.O) and resulted in decreased sales. Lucid has forecasted 2023 production at the lower end of its previous guidance. As a result of this news, shares of the Air luxury sedan maker fell about 9% in after-hours trading.
Lucid and other EV startups, including Rivian Automotive Inc (RIVN.O), have been affected by Tesla’s strategy to lower prices and increase volume, as well as the introduction of lower-priced electric models by traditional automakers. To curb mounting losses, Lucid implemented a restructuring plan in late March, which included laying off 18% of its workforce, or approximately 1,300 employees across the organization.
Lucid’s quarterly revenue of $149.4 million was significantly below analysts’ average estimate of $209.9 million, according to Refinitiv. The company also reported a wider first-quarter net loss of $779.5 million compared to $604.6 million the previous year.
Despite the disappointing revenue, Lucid CEO Peter Rawlinson stated that the company is on track to produce over 10,000 vehicles in 2023, compared to its previous forecast of 10,000 to 14,000 units this year. Garrett Nelson, an analyst at CFRA Research, noted that the guidance seemed to indicate a subtle shift.
Lucid’s Chief Financial Officer, Sherry House, stated that the company had $4.1 billion in liquidity, which would be sufficient to fund the luxury EV maker at least into the second quarter of next year.
However, industry experts say Lucid’s struggle to meet its revenue targets is a sign of broader issues in the EV market. Despite significant government support and growing environmental concerns, many consumers remain hesitant to switch to electric vehicles due to concerns about range anxiety, high costs, and the availability of charging infrastructure.
Moreover, Lucid’s current market strategy, which focuses on luxury EVs with premium pricing, could limit the company’s potential customer base. Tesla has dominated the luxury EV market for years, and other traditional automakers are also increasing their EV offerings, making it harder for smaller players like Lucid to gain a foothold.
Despite the challenges, Lucid remains committed to its mission of advancing the adoption of sustainable transportation. The company’s website states that its goal is “to accelerate the transition to sustainable mobility by creating the world’s most advanced electric vehicles.”
However, the challenges facing the company are reflective of broader issues in the EV market, and it remains to be seen whether Lucid can overcome them and achieve its ambitious goals.