Lucid Group is cutting approximately 18% of its U.S. workforce and eliminating a production shift at its Arizona manufacturing facility as the electric vehicle maker seeks to reduce costs and better align production with demand, CNBC reported.
The latest round of layoffs comes just four months after the company reduced its workforce by 12%, underscoring ongoing challenges facing the luxury EV manufacturer despite positive reviews for its vehicles.
Restructuring Under New Leadership
The workforce reduction was announced alongside the departure of former interim Chief Executive Officer and Chief Operating Officer Marc Winterhoff.
Lucid also confirmed it is eliminating the Chief Operating Officer position as part of a broader restructuring effort led by new Chief Executive Officer Silvio Napoli, who officially assumed leadership of the company on June 1.
According to CNBC, the layoffs will affect salaried employees, contractors, and hourly workers.
The company expects the restructuring to generate approximately $158 million in annualized cost savings, while incurring around $32 million in severance and related expenses.
Production Adjusted to Match Demand
Lucid said the measures are intended to reduce inventory levels and improve operational efficiency amid softer market conditions.
“These are difficult decisions taken to align production with demand, reduce inventory, and adapt to declining market conditions,” a company spokesperson said, according to CNBC.
“They are part of a broader effort to simplify the company, sharpen execution, and position Lucid to become more competitive over time.”
As part of the restructuring, Lucid is eliminating the second production shift at its AMP-1 manufacturing facility in Casa Grande, Arizona.
The move follows a period in which vehicle production exceeded deliveries. During the first quarter, Lucid produced approximately 5,500 vehicles but delivered just over 3,000 units, contributing to rising inventory levels.
Strong Products, Limited Sales Growth
Lucid’s challenge has not been developing competitive electric vehicles but generating sufficient sales volume to support its long-term growth ambitions.
The company’s flagship Air luxury sedan has earned praise for its range, efficiency, and performance, while the Gravity SUV has been well received for combining premium features with long-range capability.
Despite those strengths, sales have remained below levels needed to support the company’s expansion plans and manufacturing capacity.
Cosmos Seen as Key Growth Opportunity
Lucid is now pinning much of its future growth on the upcoming Cosmos crossover, a more affordable model expected to start below $50,000.
The vehicle is expected to target a broader customer base than the Air and Gravity, potentially allowing Lucid to compete more directly with Tesla and other mainstream EV manufacturers.
Industry observers view the Cosmos as a critical product for the company, as it could significantly increase sales volumes and improve factory utilization.
If successful, the model could help justify Lucid’s ongoing investments and support a path toward profitability. If demand falls short, however, the latest cost-cutting measures may be viewed as another sign of the challenges facing premium EV startups in an increasingly competitive market.
Focus Shifts to Efficiency and Growth
The restructuring highlights a broader trend across the electric vehicle industry, where manufacturers are increasingly focused on balancing growth ambitions with financial discipline.
For Lucid, reducing costs while preparing for the launch of a lower-priced vehicle appears to be a central part of its strategy as it seeks to strengthen its position in the global EV market.
The company’s ability to convert strong product reviews into higher sales volumes will likely determine whether the Cosmos crossover can become the turning point it needs.
