By Akash Sriram
(Reuters) -Lucid Group said its second-quarter production dropped from the previous three months while deliveries stayed flat, sending the shares of the luxury electric-vehicle maker down about 12% on Wednesday.
The Saudi Arabia-backed startup has been struggling to ramp up production in the face of supply chain issues, while a price war started by market leader Tesla (NASDAQ:TSLA) in January has intensified competition.
Lucid delivered 1,404 vehicles in the quarter to June 30, compared with 1,406 deliveries in the previous quarter. Its production fell 6% sequentially to 2,173 vehicles.
The company had trimmed its 2023 production forecast and reported a lower-than-expected first-quarter revenue in May as it took a hit from Tesla's price war and rising interest rates.
"We continue to view Lucid as a broken growth story and its ramp up rate has been particularly disappointing considering its newer, state-of-the-art factory in Casa Grande, Arizona," CFRA Research analyst Garrett Nelson said.
Lucid's Air luxury sedans start at $87,400, putting them in direct competition with the Elon Musk-led automaker's Model S that costs $88,490.
"We continue to believe significant price cuts are needed on the Air, particularly in light of increasing competition, in order to stimulate demand," Nelson added.
Lucid has also been struggling with a cash crunch and had unveiled plans in May to raise about $3 billion through a stock offering, nearly two-thirds of which would come from its largest investor Saudi Arabia's Public Investment Fund (PIF).
Last month, the EV maker signed a deal with Aston Martin, giving the British company access to its electric powertrain and battery technologies in return for a 3.7% stake.
Lucid said it would report financial results for the second quarter on Aug. 7 after markets close.