Lucid Motors, an electric vehicle (EV) startup, is set to face difficult questions about its future when it posts its first-quarter earnings after the market close on Monday. The company delivered just 1,406 vehicles in the January-March period, well below the pace needed to meet its full-year forecast of between 10,000 and 14,000 Air sedans from its Arizona factory. CEO Peter Rawlinson said in February that the company now faces a demand shortfall, unlike last year when it suffered from supply bottlenecks.
Lucid, which is majority-owned by Saudi Arabia’s Public Investment Fund, has seen production and delivery numbers fall from the fourth quarter of 2022. It reported 1,932 deliveries and a net loss of $473 million for the October-December period. Zacks Equity Research predicts that Lucid will post a higher net loss for the first quarter of this year.
In the lead-up to Monday’s earnings call, investors submitted questions for consideration. Among them: What’s the plan for the demand shortage? When will more affordable models be made? And if there’s a recession, does Lucid have enough cash to survive it? The most popular question, with more than 14,000 votes, took issue with Lucid’s projections back in 2021, prior to listing shares on the stock market.
Lucid’s stock price has lost about two-thirds of its value over the past 12 months. The company’s headquarters are located in Newark, Calif., a few miles from Tesla’s Fremont factory. Rawlinson said on the previous earnings call in February that the company had solved most of its manufacturing issues and that he was shifting his focus to drumming up more sales for the Air. The Air has a starting price of $89,095 with shipping, but the company has mostly been producing higher trim versions with considerably higher transaction prices. Lucid has said it is stepping up production of lower trims.
One hurdle the Air faces is that it’s an executive sedan in a U.S. market dominated by crossovers and pickups. EV rival Rivian Automotive, which launched production in late 2021, said in February that it has a considerable order backlog for its R1T electric pickup and R1S crossover. The R1S starts at $79,800 with shipping.
Lucid also faces increased competition from Tesla, which has sharply reduced the price for its flagship Model S sedan this year, and from Mercedes-Benz and BMW with their new EV sedans. In March, Lucid cut about 1,300 employees and is rolling out new marketing efforts to spur sales. Last month, the company began a 42-city tour with Air models for display at pop-up stores.
The Dream Ahead Tour started mid-April with four stops in Florida and will finish in mid-November in Dallas. The pop-ups will offer test drives and information about Lucid’s proprietary EV technologies. The Air sedan holds the U.S. record for EV range and efficiency, according to the EPA. Lucid, which sells directly to buyers, has 35 retail stores in North America concentrated mostly in EV-friendly cities.
The automaker recently teased images of the Gravity crossover now in development. Lucid said in late April that the three-row crossover will soon start testing in camouflage on U.S. roads and offer comfortable seating for up to seven adults and their gear, the driving dynamics of a sports car, and greater electric range than any SUV. The company’s most recent studio opened in March in Corte Madera, Calif., near San Francisco.
