- Lucid Motors revealed a drop in revenue in the first quarter of 2023 as well as reduced production, hinting at a slowdown in demand for the Air sedan.
- The electric car maker reported a net loss of $779.5 million in the first three months of 2023, compared with $472.6 million in the previous quarter, but still has $3.4 billion in cash, buying its operations for about year.
- Lucid is currently testing the Gravity SUV, which is expected to enter production in 2024 and become the EV manufacturer’s second standalone offering.
Lucid Motors has already entered the spring of 2023 on a wave of cost- and staff-cutting measures, as well as price cuts for the Air sedan. But another cut could materialize, with Lucid slightly tempering its 2023 total production expectations.
The electric car startup now faces growing concerns about falling demand, the first telltale signs of which were raised by industry watchers late last year.
Lucid’s financial results revealed this week certainly show a gradual decline in fortunes: the company reported revenue of $149.4 million in the first quarter of 2023, up from $257.7 million in the fourth quarter of 2022 and $195, 5 million in the third quarter quarter. The electric car maker’s net loss widened to $779.5 million in the first three months of the year, compared with $472.6 million in the previous quarter.
Production figures were also down, with Lucid producing 2,314 vehicles in the first three months of 2023, compared to 3,493 in the fourth quarter of last year. Overall, Lucid produced 7,180 vehicles in 2022, delivering a much more modest 4,369 vehicles overall during that time.
Lucid entered 2023 having originally expected to produce between 10,000 and 14,000 vehicles that year, but now states that it “plans to produce more than 10,000 vehicles in 2023.”
The good news is that Lucid still has more than $3 billion in cash after the first three months of 2023, giving it enough cash to run through at least mid-2024. But preparing the Gravity SUV for production in 2024 d. will require greater costs.
“Our revenue in the first quarter was approximately $149 million, representing a year-over-year increase of 159%. We ended the quarter with just over $3.4 billion in cash, cash equivalents and investments, with total liquidity of approximately $4.1 billion, which we believe is sufficient to fund the company through at least the second quarter of 2024.” , said Sherry House, Lucid’s CFO.
What’s to blame for the increasingly apparent slowdown in luxury EV sales?
Growing fears of a recession were one of the most immediate suspects, at least initially, although such fears are hardly new in an age of pandemic-torn supply chains and soaring commodity prices. However, potential buyers of a six-figure electric sedan are unlikely to be swayed by minor economic fluctuations, so this culprit may not be so likely.
Another theory is an overall slowdown in the EV market following a short-lived buying frenzy seen in Europe and the US in 2021 and the first half of 2022. The downturn began to become apparent in late fall 2022 and prompted some unusually generous markdowns on prices from Tesla.
Another theory is that there are too many luxury EV sedans out there right now, with Lucid having to contend with a growing number of German competitors.
If there’s a lifeline for Lucid on the horizon, it’s the planned production launch of the Gravity SUV, which promises to give future EV buyers who may already be weary of six-figure electric sedans another alternative.
“We’ll be unveiling our Gravity SUV later this year ahead of its 2024 launch, and we can’t wait for everyone to experience it,” said Peter Rawlinson, CEO and CTO of Lucid.
Is the luxury EV market slowing due to too many EV sedans, recession worries, or some other reason? Let us know what you think.