Lucid sees EV production disappointing in 2023 as orders fall amid declining demand

22 February (Reuters) – (This story from 22 February has been corrected to change the period from Q2 to Q3 in paragraph 8)

Lucid Group Inc (LCID.O) predicted on Wednesday that 2023 production will fall far short of analyst expectations and reported a large drop in orders in the fourth quarter amid weaker demand, driving shares of the electric car maker after hours fell by 11%.

The Newark, California-based company, already struggling with supply chain and logistics issues and struggling to deliver cars, was hit by aggressive price cuts brought on by Tesla Inc. (TSLA.O) that lured consumers away from its luxury cars amid rising prices. interest rates and rising inflation.

“There is a lot more competition than there was a year ago… a lot more EVs are becoming available at lower prices than the Lucid Air vehicle,” said Garrett Nelson, an analyst with CFRA Research. “There’s probably a lot of frustration from customers waiting so long to get the vehicles they ordered.”

Lucid said it expects to produce 10,000 to 14,000 luxury electric vehicles this year. According to Visible Alpha, analysts expected the company to make an average of 21,815 cars.

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The company, backed by Saudi Arabia’s sovereign wealth fund Public Investment Fund, delivered 4,369 cars last year, far short of the 7,180 produced.

“We are past the major bottlenecks that are limiting production, but this had some impact on the demand we generated in the beginning, and this was exacerbated by the challenging macroeconomic environment,” said Peter Rawlinson, Lucid CEO. a call to analysts, after the company reported fourth-quarter revenue that beat expectations.

Price cuts by Tesla and Ford Motor Co (FN) have made it harder for rivals like Rivian Automotive Inc (RIVN.O) and Lucid to gain a share in an industry competing for shrinking consumer wallets.

Lucid said it had more than 28,000 orders as of Feb. 21, down 6,000 reservations from the third quarter, after delivering about 1,900 vehicles and seeing cancellations. That was despite Lucid offering a $7,500 rebate on Feb. 9 for purchases of certain variants of the Air sedan before March 31.

Sherry House chief of finance said Lucid will not be publishing quarterly booking figures going forward.

This year, the company will focus on improving production and deliveries, and will take a “vigorous and comprehensive” look at reducing operating and production costs.

House said Lucid should invest between $1.5 billion and $1.75 billion by 2023. That’s a 40% increase from 2022, but well below analyst expectations of $2.24 billion.

Lucid reported a cash balance of $1.74 billion in the fourth quarter after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves.

Revenue increased to $257.7 million in the quarter ended December 31 from $26.4 million a year earlier. Analysts had expected revenue of $302.6 million on average, according to IBES data from Refinitiv.

The company’s net loss fell to $472.6 million, or 28 cents per share, from a loss of $1.05 billion, or 64 cents per share, a year earlier.

Shares of Lucid fell as much as 10.6% during extended trading. Inventory fell 82% last year after Lucid cut its production forecast in half due to supply chain issues.

Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Edited by Shinjini Ganguli, David Gregorio, Lincoln Feast and Leslie Adler

Our Standards: The Thomson Reuters Principles of Trust.


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