Lucid Motors has updated its 2023 production outlook due to softening demand for luxury electric vehicles. The company now plans to produce 8,000 to 8,500 vehicles by the end of the year, down from its previous guidance of more than 10,000. This adjustment is aimed at aligning production with actual deliveries.
In the third quarter, Lucid delivered 1,457 of its luxury electric Air sedans, falling short of Wall Street expectations by about 500 vehicles. Year-over-year and quarter-over-quarter, Lucid’s delivery numbers remained relatively flat.
The shift in production guidance and weaker delivery numbers coincide with a trend of consumers showing reluctance to invest heavily in luxury electric vehicles. Instead, they are favouring more budget-friendly hybrid options. To meet this shift in demand, companies worldwide are exploring ways to offer electric vehicles at lower price points. Notably, Tesla has been continuously reducing prices to boost sales, and other automakers like Ford and Rivian are developing more affordable EV models.
Lucid began reducing prices across its Air lineup in August and recently made further price cuts. The company’s new luxury electric SUV model, the Gravity, is set to be unveiled soon, with production scheduled to start in late 2024. While pricing details for the Gravity have not been revealed, it is expected to be in the $100,000 range.
Lucid reported $137.8 million in revenue for the third quarter, missing Wall Street estimates by a significant margin, down approximately 30% from the same period in 2022. The company reported a net loss of $630.8 million for the quarter, despite having a substantial amount of cash and liquidity.
Lucid is maintaining its strategic investments in manufacturing capacity, retail studios, service centres, and vendor tooling for the Gravity. The company expects to spend between $1 billion and $1.1 billion on capital expenditures for the year. While Lucid’s liquidity position remains strong, the negative free cash flow for the quarter signals challenges in covering its high costs.
Following the announcement, Lucid’s stock fell by nearly 7% in after-hours trading.