Amid the release of its Q3 results, Lucid (LCID) saw a plummet of more than 8% in its shares. The existing luxury electric vehicle producer has trimmed its production forecast and reported figures that missed the mark, signaling a slowing demand for its high-priced vehicles.
Lucid is now anticipating a production of 8,000 to 8,500 vehicles, down from its previous guidance of over 10,000. The company cited the need to “prudently align with deliveries” as the reason for this development. Notably, Lucid initially projected a production of 12,000 vehicles for 2023.
Despite reporting a revenue of $137.8 million in Q3, it fell short of Wall Street expectations of $177 million. But Lucid managed to outperform consensus estimates with adjusted figures for losses per share and EBITDA.
Amid the struggle, Lucid has resorted to implementing significant price slashes to boost demand, especially since its luxury sedan, the Air, does not qualify for federal EV tax credits. Just last week, Lucid reduced the prices of its vehicle models – Air Touring, Air Pure, and Air Grand Touring.
Lucid’s CEO, Peter Rawlinson, cited the launch of more affordable vehicle versions, increased production at its Arizona factory, and the opening of its first plant in Saudi Arabia as notable achievements.
In a noteworthy development, Lucid is gearing up for the launch of its new Gravity SUV at the LA Auto Show and anticipates production of the Gravity to commence in late 2024.
“We recognize that there are forces that are out of our control and that some are not. We are navigating an uneven macro environment that is also affecting many others in the industry. But I’m excited about the remainder of this year and for 2024,” Rawlinson expressed in the company’s analyst conference call.
Despite the anticipated debut of the Gravity SUV, CFRA analyst Garrett Nelson expressed his dissatisfaction with Lucid’s performance, indicating “weak demand” and concerns over selling cars at a loss.
Referring to LCID’s results, Nelson drew attention to the “disturbing sequential drop in price realizations” and reiterated his Sell rating, with a price target of $2.
Year to date, shares have tumbled by 42%, and with ASPs falling, Rawlinson emphasized that “drastic steps” aren’t an immediate priority to rectify the situation.
“We’re looking at all measures here, looking at our efficiency of making the cars, looking [at] our working capital, looking at inventory, all aspects of the business. We’re also pushing like crazy to improve our delivery numbers,” Rawlinson stated on the earnings call.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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