Lucid Motors scales back 2023 EV goals as losses mount

Lucid Motors announced a significant reduction in its production targets for 2023. This announcement in the aftermath of the company's Q3 report, which showed increasing operational losses.

Initially, Lucid Motors had ambitious plans to manufacture between 10,000 and 14,000 units of Lucid Air this year. After later revising that to the lower end of the interval the company has now admitted that it will miss even that and will deliver 8,000 to 8,500 vehicles. This adjustment represents a drastic cut of over 40% from its upper-end target set in the fourth quarter of 2022.

The third quarter of the year saw a marginal increase in Lucid EV deliveries, reaching 1,456 vehicles, up from 1,404 in Q2. However, this figure pales in comparison to the peak of 1,932 deliveries in Q4 of 2022. Moreover, production rates also declined significantly, with only 1,550 vehicles produced in Q3, a steep drop of over 50% from the peak of 3,493 vehicles in the last quarter of 2022.

Financially, Lucid Motors is navigating through turbulent waters. The Q3 results showed a decrease in revenue to $137.8 million, down from $195.5 million in the previous year. This lower output exacerbated the company's operating losses, which expanded to $752.9 million, up from $687.5 million last year. The net loss for the company in Q3 amounted to $630.9 million, contributing to a staggering $2.17 billion loss in the first nine months of the year.

Lucid's CEO, Peter Rawlinson, acknowledged the need for improvements in customer experience and delivery processes. The company's CFO, Sherry House, highlighted progress in cost control and identified further opportunities for cost reductions in 2024. Despite the financial headwinds, Lucid ended the quarter with a liquidity of $5.45 billion, which House believes will sustain the company through its next significant venture, the production of the Lucid Gravity, and beyond into 2025.

In an effort to stimulate demand, Lucid slashed prices on its Air electric sedans by up to $12,000 earlier this year. The company is also expanding its product lineup. During the quarter, Lucid began delivering its Lucid Air Sapphire, positioned as a rival to Tesla Model S Plaid. Then we have Lucid's first electric SUV, the Lucid Gravity, set to be unveiled at the LA Auto Show next week, with production expected to commence in late 2024.

Lucid's stock experienced a downturn of approximately 5% following the Q3 earnings and production announcement. Over the past year, the company's shares have plummeted by nearly 69%.

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