EV Makers Stock Plunges After Reporting Wider Than Expected Losses, Loses 347K Per Vehicle

Lucid Motors, the electric vehicle manufacturer, recently announced its first quarter financial results, which paint a mixed picture of the company’s performance and raise questions about the readiness of the EV market for widespread adoption.

While Lucid’s revenue exceeded expectations, reaching $172.7 million and marking a 16% increase from the previous year, the company also reported a wider-than-expected loss of $0.30 per share, with an adjusted EBITDA loss of $598.4 million.

Despite the financial challenges, Lucid CEO Peter Rawlinson remains optimistic about the company’s future, particularly with the upcoming release of the Gravity SUV in late 2024. “Our sales momentum is building, our focus upon cost remains relentless, and we believe Gravity is on track to become the best SUV in the world,” Rawlinson stated.

The company also confirmed plans for a midsize vehicle launch in late 2026.

However, Lucid’s stock took a hit in after-hours trading, dropping over 8% following the earnings report.

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This reaction suggests that investors are still cautious about the company’s prospects and the overall demand for electric vehicles in the current market.

In the first quarter, Lucid produced 1,728 vehicles and delivered 1,967, a slight improvement from the previous quarter’s delivery numbers.

The company has set a target of producing 9,000 vehicles in 2024, up from the 8,428 vehicles produced and 6,001 delivered to clients in 2022.

Lucid’s recent price cuts, announced in February, may have contributed to the boost in sales, but concerns remain about the impact on the company’s margins.

Lucid’s interim CFO, Gagan Dhingra, addressed these concerns, stating, “If you look at in Q1, despite the pricing actions we took in the current quarter, our gross margin improved sequentially and that was as a result of cost optimization initiatives that were taking in the company, and technology is playing a critical role — battery costs, you know, \[have\] come down.”

Dhingra also highlighted the company’s efforts to reduce bill of material and logistics costs to improve margins.

Another area of focus for Lucid is the capital expenditures associated with the production of the Gravity SUV.

The company reported capital expenditures of $198.2 million in the quarter, with an expected total of $1.5 billion for 2024.

Rawlinson expressed confidence that these investments will pay off, citing the potential for the Gravity SUV to provide the company with greater scale and volume.

Lucid’s cash position remains a point of interest for investors, with the company reporting $4.62 billion in cash and cash equivalents on hand, sufficient to last into the second quarter of 2025.

The company’s recent $1 billion investment agreement with its majority shareholder, Ayar Third Investment Company, an affiliate of Saudi Arabia’s Public Investment Fund (PIF), has provided additional financial support.

Rawlinson emphasized the importance of Lucid’s relationship with Saudi Arabia’s PIF, stating, “We are a cornerstone of \[Saudi Arabia’s 2030\] vision, we are mutually incentivized for success. PIF wants us to succeed, this isn’t like a normal mere financial investment. But why are they confident in us? Because what differentiates us is that we’ve got the world’s highest technology in the space.”

Despite Rawlinson’s optimism, Lucid’s first quarter results serve as another indication that the EV market is still facing challenges in terms of consumer demand and widespread adoption.

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As the company continues to navigate the competitive landscape and work towards the release of its highly anticipated Gravity SUV, it will be crucial for Lucid to demonstrate its ability to manage costs, improve margins, and deliver on its production targets to maintain investor confidence and establish itself as a leading player in the EV industry.