Lucid said Tuesday in the third quarter that it revised its production forecast for 2023 amid declining demand for luxury electric vehicles. Earnings report.
The electric vehicle manufacturer said it will produce between 8,000 and 8,500 vehicles by the end of the year, down from previous guidance of more than 10,000, “to prudently align with deliveries.”
In the third quarter, Lucid delivered 1,457 luxury electric sedans, missing Wall Street expectations by about 500 vehicles. On a yearly and quarterly basis, Lucid’s delivery numbers have been fairly flat.
The revised production guidelines and weak delivery numbers come as consumers are unwilling to spend big on electric vehicles, preferring instead to go for more budget-friendly hybrids. To keep up with demand, companies around the world are looking for ways to offer electric vehicles at a lower price. Tesla is constantly lowering its prices across the board to boost sales. Automakers such as Ford and Rivian are working to bring cheaper models to market.
In August, Lucid began cutting prices across its entire Air lineup. last week, The electric car maker has doubled down, which reduced the price of the Air Touring model to $87,500, down from $95,000, and the price of the Grand Touring model by $10,000 to $115,600. The four-wheel-drive Air Pure is now priced at $74,900, down from $82,400.
Although these cars are cheaper, they are still expensive, and Lucid is about to unveil another luxury electric car model that will likely be just as expensive.
Lucid’s Gravity SUV is set to be unveiled next week. The company said that production is still scheduled to begin in late 2024. The price of this car has not been revealed yet, but it is expected to reach around $100,000.
Lucid has missed Wall Street estimates
Lucid reported revenue of $137.8 million in the third quarter, well short of Wall Street estimates of $192.72 million, according to Yahoo financials. These revenues were down about 30% compared to the same period in 2022, when Lucid reported profits of $195.5 million.
Some of that can be attributed to restructuring fees. In March, Lucid laid off 18% of employees, or about 1,300 employees, to cut costs at the company. Lucid said its restructuring efforts will also lead to other cost reductions, but the automaker’s spending on selling, general and administrative expenses increased year-on-year.
Lucid ended the quarter with a net loss of $630.8 million. The automaker still has $1.16 billion in cash and equivalents and $5.45 billion in total liquidity, which Lucid CFO Sherri House says will get the Gravity to production and help the company stay afloat through 2025.
“We also made progress on the cost control program we implemented in the first half of the year and have identified further opportunities for 2024,” House said in a statement.
While Lucid’s liquidity position may be strong right now, the automaker still ended the quarter with negative free cash flow of -$706 million, a glaring sign that Lucid isn’t bringing in enough cash to cover its high costs.
For this year, Lucid expects to spend between $1 billion and $1.1 billion on capital expenditures as the company strategically invests in manufacturing capacity, retail studios and service centers, and Gravity’s selling tools, according to House.
Lucid stock fell nearly 7% in after-hours trading Tuesday.