Lucid Group, the luxury electric-vehicle manufacturer backed by Saudi Arabia, experienced a decline in production during the second quarter of the year, resulting in a 12% drop in the company’s shares on Wednesday. While deliveries remained stagnant, the supply chain challenges and an ongoing price war initiated by Tesla in January intensified the competition for Lucid.
For the period ending June 30, Lucid delivered 1,404 vehicles, a minor decrease from the 1,406 deliveries in the previous quarter. Sequentially, production also fell by 6% to 2,173 vehicles. The company had previously revised its 2023 production forecast and reported lower-than-expected first-quarter revenue due to the impact of Tesla’s price war and rising interest rates.
CFRA Research analyst Garrett Nelson expressed disappointment in Lucid’s growth rate, labeling it as a “broken growth story.” Despite possessing a state-of-the-art factory in Casa Grande, Arizona, Lucid’s ramp-up rate has been underwhelming.
With its Air luxury sedans starting at $87,400, Lucid finds itself in direct competition with Tesla’s Model S, priced at $88,490. Nelson emphasized the need for significant price reductions on the Air to stimulate demand, particularly in the face of mounting competition.
In addition to production challenges, Lucid has faced financial difficulties and recently unveiled plans in May to raise approximately $3 billion through a stock offering. The largest investor, Saudi Arabia‘s Public Investment Fund (PIF), is expected to contribute about two-thirds of the funding.
Seeking strategic partnerships, Lucid entered into a deal with Aston Martin last month. The agreement grants Aston Martin access to Lucid’s electric powertrain and battery technologies in exchange for a 3.7% stake in the British automaker.
Lucid plans to disclose its financial results for the second quarter on August 7 after the market closes.
