Lucid Group reported a decrease in deliveries and production during the fourth quarter of the previous year, leading to a significant drop in its shares to a record low.
The decline in deliveries and production is attributed to weakened demand for electric vehicles (EVs) due to high-interest rates, causing customers to cut back on significant purchases. This trend has prompted major automakers like Ford and General Motors to delay their planned EV and battery factory expansion initiatives.
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Additionally, Lucid has been impacted by a price war initiated by market leader Tesla a year ago, aimed at solidifying its EV market share and addressing the overall slowdown in demand.
Garrett Nelson, a senior equity analyst at CFRA Research, noted, “With (Lucid) shares hitting a new record low, we see little in the way of fundamental or technical support for the stock and expect additional lows to be set.”
In the fourth quarter, Lucid’s deliveries saw a decline of approximately 10%, amounting to 1,734 vehicles compared to 1,932 units delivered in the same period the previous year. The production also dropped by about 31% to 2,391 vehicles during the quarter, resulting in an annual production of 8,428 vehicles, aligning with its revised target of 8,000 to 8,500 units.
Having revised its production forecast in November from over 10,000 units, Lucid stated the adjustment was necessary to prudently align output with actual deliveries.
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Shares of Lucid, supported by Saudi Arabia’s Public Investment Fund (PIF), experienced a decline of approximately 38% over the past year. Analyst Garrett Nelson expressed concern, stating, “The results imply that LCID’s cash burn rates have remained extremely high, and its runway is clearly shortening.”
Despite the challenges, Lucid did show growth in fourth-quarter deliveries and production compared to the preceding three months. The company is expected to disclose its quarterly financial results on February 21.
