Lucid hits production snag with Gravity SUV, still posts record deliveries

Lucid Motors is facing a slower-than-expected production ramp-up for its first-ever SUV, the Lucid Gravity. In the Q2 results call with investors, the company announced it was trimming its annual production forecast, pointing to supply chain troubles, including a shortage of critical magnets from China.

The company now expects to produce between 18,000 and 20,000 vehicles in 2025, down from its earlier target of 20,000. According to interim CEO Marc Winterhoff, the sluggish start for the Gravity SUV stems from two main issues: suppliers struggling with capacity and a restricted supply of rare earth magnets - a direct result of ongoing trade disputes, which led China to limit exports of the crucial material back in April.

Winterhoff acknowledged the setback, stating, "We are not where we want to be with Lucid Gravity production." He assured investors that the company has since sourced different magnets and secured enough to continue production through the end of the year. The company expects to "significantly increase production in the second half of the year" to make up for the slow start. Deliveries of the Lucid Gravity began late last year to a handful of individuals close to the company, with wider public deliveries originally planned for late April.

For the second quarter, Lucid Motors reported revenue of $259 million, which fell short of Wall Street's expectation of $280 million. It posted a net loss of $790 million for the quarter. These results caused the company's stock to slide about 9% in after-hours trading. Despite the loss, Lucid noted that it ended the quarter with a substantial $4.86 billion in total liquidity, which it believes is enough to fund its operations and investments into the second half of 2026.

A lot is riding on the success of the Lucid Gravity. As the company's first entry into the booming SUV market, the Gravity is key to driving higher sales volume compared to its current model, the Air sedan. Achieving manufacturing scale and boosting sales are critical for the EV startup, which continues to burn through cash as it grows.

But even with the production challenges, Lucid did mark a milestone, achieving its sixth consecutive quarter of record deliveries. The company delivered 3,309 vehicles in the second quarter while producing 3,863 at its factory in Casa Grande, Arizona.

During the call, the company confirmed it is on track to reveal a new, more affordable midsize vehicle platform next year, with production planned for 2026. This new line of electric cars is expected to start at around $50,000, placing it in direct competition with high-volume EVs like the Tesla Model Y and Model 3.

To improve its brand and financial footing, Lucid also announced a multi-year partnership with actor Timothée Chalamet as a brand ambassador and a major collaboration with Uber and Nuro to deploy 20,000 autonomous electric robotaxis. As part of that deal, Uber will invest $300 million in Lucid.

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