In a bid to align with the softening demand for luxury electric vehicles (EVs), Lucid has revised its 2023 production outlook, according to its third-quarter earnings report released on Tuesday. The EV maker now plans to produce 8,000 to 8,500 vehicles by the end of the year, down from its previous guidance of over 10,000, in a move to prudently adjust to market conditions and improve deliveries.
Key Takeaway
Lucid has revised its 2023 production plans to produce 8,000 to 8,500 vehicles, reflecting a cautious approach to address the current weak demand for luxury EVs.
Delivery Numbers Fall Short of Expectations
In the third quarter, Lucid’s delivery of its luxury electric Air sedans reached 1,457 units, which fell short of Wall Street expectations by approximately 500 vehicles. However, the delivery figures remained relatively flat year-over-year and quarter-over-quarter.
Consumer Shift Towards More Affordable Options
The adjustment in production plans and underwhelming delivery numbers coincide with a trend of consumers preferring more budget-friendly hybrid vehicles over expensive EVs. To meet the demand, automakers worldwide, including Tesla, Ford, and Rivian, have been reducing prices and introducing lower-cost EV models.
In August, Lucid began reducing prices across its Air lineup, and last week, the company further lowered the prices of its Air Touring and Grand Touring models. Despite the price reductions, Lucid’s EVs still remain in the luxury segment, and the upcoming unveiling of the Gravity SUV is expected to have a similar price tag of around $100,000.
Financial Performance
In the third quarter, Lucid reported revenue of $137.8 million, significantly missing Wall Street estimates of $192.72 million. The revenue marked a 30% decrease compared to the same period in 2022 when Lucid reported earnings of $195.5 million.
Some of the revenue decline can be attributed to restructuring charges and ongoing efforts to reduce costs, including a reduction in workforce earlier this year. Lucid’s spending on selling, general, and administrative expenses has increased year-over-year.
Despite the challenging financial performance, Lucid maintains a strong liquidity position with $1.16 billion in cash and cash equivalents. The company expects this liquidity, coupled with its ongoing cost control program, to support the production of the Gravity SUV and sustain operations until 2025.
Capital Expenditures and Future Plans
Lucid anticipates capital expenditures between $1 billion and $1.1 billion for the year as it strategically invests in manufacturing capacity, retail studios and service centers, and vendor tooling for the Gravity SUV. The company aims to position itself for future growth and strengthen its market presence.
Following the announcement, Lucid’s stock fell approximately 7% during after-hours trading on Tuesday.
