Things are not going well at Lucid!

Lucid the young luxury electric vehicle maker aiming to be on the heels of Tesla in terms of technology and fuel efficiency, suffered catastrophic losses during the 1^er quarter of 2023. In fact, we note that the manufacturer, which planned to sell a certain number of vehicles during the year, had a rather disappointing end result. Lucid therefore finds himself with a surplus of inventory.

Expensive cars in a tough economy

It’s hard to understand why Lucid collapsed so quickly, but it’s clear that the affordability of its models selling over $100,000 isn’t helping the automaker in a slow economy.

Here are some figures: during the 1^er quarter of 2023, Lucid recorded a financial loss of $780 million, an increase of $176 million from the previous year. Revenues during the same period amounted to only $149.4 million. So it’s obvious that the builder has been burning cash throughout the 1^er quarter.

This is mainly attributable to a dramatic decrease in the number of vehicles delivered. While Lucid originally planned to build between 10,000 and 14,000 vehicles in 2023, company CEO Peter Rawlinson recently changed his tune, saying the company plans to build just over 10. 000 vehicles this year.

However, out of 2,314 vehicles sold during this period of the year, Lucid only delivered 1,406.

All is not lost

Lucid’s financial losses are indeed frightening, but it should be noted that the manufacturer remains very optimistic for the future. In fact, Lucid is still in very good financial health thanks to total liquidity estimated at nearly $4.9 billion. Such capital would allow Lucid, according to several industry analysts, to operate at least until 1^er quarter of 2024.

During a call to its shareholders, Mr. Rawlinson said he wanted to bet big on the next SUV from the manufacturer, the electric Gravity, which will line up alongside the Air sedan in the coming months. Even if it is a vehicle just as expensive as its big sister, this model could allow Lucid to seek new market shares in a world where consumers are crazy about SUVs, especially electric ones.

Conclusion

It’s not easy to get into building cars these days. While the last few years have given rise to a host of new players, very few really seem to be able to properly establish themselves in the market. Let’s say that the economic situation we are going through, combined with still very present supply challenges, has not helped these new players to break through as expected.

As for the financial losses of Lucid, it is still too early to say that the manufacturer is in trouble. Let us remember the early years of Tesla where the company recorded no profit for several years. Lucid seems to have good financial backing. However, if the situation does not change in its favor over the next year, things could indeed end badly for this young company. To be continued!