In Barcelona, Spain, during the Mobile World Congress 2023 (MWC), the largest annual gathering in the telecommunications industry, visitors are seen walking around the Lucid Air. The photograph was taken on February 28, 2023 by Chris Jung of Nurphoto for Getty Images.
Luxury electric vehicle manufacturer Lucid Group announced on Wednesday that it delivered 1,404 of its Air sedans to customers in the second quarter. The news has raised concerns about demand in the market.
This figure represents a slight decline from the 1,406 deliveries of the first quarter of 2023, and a significant increase from the 679 deliveries in the second quarter of 2022. Analysts on Wall Street, as polled by FactSet, had anticipated around 2,000 deliveries of the Lucid Air in the second quarter.
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In the same period, Lucid produced a total of 2,173 Airs, which is slightly lower than the 2,314 produced in the first quarter.
Following this news, the company’s shares plummeted over 11% during midday trading.
Over the past year until Tuesday, Lucid’s stock has witnessed a decline of approximately 58%. This sharp decrease has raised concerns about the demand for the Air luxury sedan. While the Air is highly regarded as a luxury sedan with the longest range of any electric vehicle currently available in the U.S., its price starts at $92,900 before incentives, which makes it quite expensive. However, more affordable variants of the Air are expected to be released in the future.
In February, Lucid caught analysts on Wall Street off guard when it announced that it planned to build only 10,000 to 14,000 Airs in 2023, despite having “over 28,000” reservations. This led to speculation that the company was facing challenges in converting these reservations into actual orders. The CEO, Peter Rawlinson, hinted at the possibility of marketing hurdles being a contributing factor.
Adding to its troubles, Lucid laid off approximately 1,300 employees, which constituted about 18% of its workforce, in late March.
However, not all the recent developments have been negative for Lucid. On June 26, the company announced a deal with Aston Martin Lagonda. Under this agreement, Lucid will supply Aston Martin with electric-vehicle powertrains, battery systems, and related technology. In return, Lucid will receive about $232 million in payments, which will be phased, and a 3.7% stake in Aston Martin, the renowned British supercar manufacturer. It is worth noting that both Lucid and Aston Martin have the Public Investment Fund of Saudi Arabia as one of their investors.
During its first-quarter earnings report on May 8, Lucid projected producing “over 10,000” vehicles in 2023, and also announced having enough capital to continue operations until at least the second quarter of 2024. Recently, the company raised an additional $3 billion at the end of May.
Lucid is scheduled to release its second-quarter results after the U.S. markets close on August 7.
Correction: This story has been updated to reflect the accurate starting price for the Lucid Air.
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