50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Lucid sticks to production goal, has enough cash for electric SUV next year

Published 08/07/2023, 04:10 PM
Updated 08/07/2023, 07:46 PM
© Reuters. FILE PHOTO: A logo is seen on the wheel of a Lucid Air Dream Edition parked at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) began trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New
TSLA
-

By Akash Sriram and Abhirup Roy

(Reuters) -Luxury electric vehicle maker Lucid stuck to its annual production target on Monday and said it had enough cash to start producing its much-awaited sport utility vehicles next year and into 2025, sending its shares about 4% higher in extended trading.

The company reported second-quarter earnings and revenue below market expectations, but its strong liquidity after a $3 billion stock offering in June led by its majority owner, Saudi Arabia's Public Investment Fund, has given it an advantage over cash-poor peers that are battling parts shortages.

"We are not limited by our ability to manufacture. Most of the supply chain has now come through out of the COVID era," CEO Peter Rawlinson told Reuters. "We are limited by our ability to sell the cars right now, and that is my key focus."

Lucid said it was on track to produce 10,000 vehicles this year, but its deliveries in the second quarter were largely unchanged from the prior three months at 1,404 units.

To boost demand, the EV maker on Saturday slashed prices for its Air luxury sedan as part of a special offer, with the Air Pure model now selling for $82,400.

Competition from Tesla's (O:TSLA) Model S, Air's direct competitor and whose prices were cut sharply this year to $88,490, and rising borrowing costs have posed a threat to Lucid's growth.

"People have been affected by the macroeconomic climate ... so we're bringing that price down," Lucid's chief financial officer, Sherry House, said in an interview, adding that reducing costs helped the company make that decision.

Although logistics and labor costs have come down, there was a "significant amount of opportunity" to cut costs further, she said.

Despite Lucid's holding a lot of inventory, House and Rawlinson did not confirm how long the offer would last and if Lucid will stick to the lower prices if demand improves.

Lucid on Monday reported revenue in the April-June period of $150.9 million, missing estimates of $175 million, according to seven analysts polled by Refinitiv. Adjusted loss stood at 42 cents per share, wider than an estimated loss of 33 cents.

Cash stood at $2.78 billion at the end of June, compared with $900 million three month prior.

© Reuters. FILE PHOTO: A logo is seen on the wheel of a Lucid Air Dream Edition parked at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) began trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New York City, New York, U.S., July 26, 2021. REUTERS/Andrew Kelly

"Investors seem to be overlooking the miss in favor of the increased liquidity runway," CFRA Research analyst Garrett Nelson said.

Lucid is set to unveil its Gravity SUV in November ahead of its launch in 2024.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.