Lucid has recently made a significant move in response to the competitive landscape of the U.S. EV industry. The company announced a price reduction on its Air luxury sedans, slashing prices by as much as $12,400. This decision comes amid fierce competition in the electric vehicle market and an ongoing price war triggered by Tesla, a major player in the industry.
As part of this offer, Lucid has lowered the price of its Air Pure variant by $5,000, bringing it down to $82,400 from the original $87,400. Additionally, the more powerful Touring and Grand Touring versions have seen substantial price cuts of $12,400, now priced at $95,000 and $125,600, respectively. The company clarified that this promotional offer would be applicable until supplies last. However, specific details regarding the stock availability for this offer were not disclosed by a spokesperson for Lucid.
The move to reduce prices comes after a challenging period for the automotive industry, particularly with the impact of rising raw material prices and supply chain disruptions caused by the COVID-19 pandemic. Lucid, majority-owned by Saudi Arabia’s Public Investment Fund, along with other EV manufacturers, had to raise prices over a year ago to cope with these challenges.
Despite these past difficulties, the current market conditions have seen consumer demand dampened due to rising interest rates aimed at curbing inflation and concerns of a potential recession. Responding to this situation, Tesla, a key competitor to Lucid’s Air lineup, has already taken the step of reducing prices for its Model S and Model S Plaid, which directly compete with Lucid’s offerings.
The EV market is further complicated by a federal tax credit of $7,500 under the Inflation Reduction Act, which favors lower-priced EV models in attracting customers. Unfortunately, high-end models like Lucid’s Air are not eligible for this tax credit, making it more challenging for the company to gain a competitive edge.
In the face of these market challenges, Lucid faces additional pressure as it anticipates deeper losses in its second-quarter earnings. Supply-chain issues have resulted in a decline in production during the April-June period for the Newark, California-based company.
Lucid’s decision to reduce the prices of its Air luxury sedans represents a strategic move to stay competitive in the evolving EV industry. However, the company must navigate the complexities of market dynamics and competition from established automakers to secure its market share and financial stability.
