Lucid's Troubles Surge

Cars and Drivers

Lucid electric vehicles — hapabapa / iStock Editorial via Getty Images

Published: March 28, 2023 7:30 am

Lucid Group Inc. (NASDAQ: LCID), the deeply troubled electric vehicle (EV) maker, recalled a number of its most important Lucid Air model. A total of 637 of these, “because of a potential power loss issue that may shut down the electric motors,” according to Inside EVs. The bad news for owners is that the flaw is dangerous. (Here are the 13 biggest electric vehicle business failures in American history.)

Lucid was quick to say this was a very small portion of Lucid Air vehicles, but the damage already was done.

Recently, Lucid announced another troubled quarter. Its revenue was $258 million, which was short of expectations. It lost $0.28 a share ($759 million). The company built 7,180 vehicles, which was well short of the forecast number. Lucid faces a cash squeeze and concerns about its future.

“The company ended the year with about $4.4 billion in cash and roughly $500 million available via lines of credit, enough to last until the first quarter of 2024,” according to Chief Financial Officer Sherry House. That is a grim figure, given that Lucid will build a shockingly low number of vehicles next year.

Production figures do not get any better next year. Its production guidance was 10,000 to 14,000 for the entire year. Peter Rawlinson, Lucid’s CEO and chief technology officer, commented as the numbers were released, “Lucid Air has it all — industry-leading range, exceptional driving dynamics, and superior performance all wrapped up in a truly elegant design with a spacious interior cabin.” No one cares, if they cannot buy one, and prospective buyers also have to worry about whether Lucid will be in business in two years.

Lucid faces a market in which the number of EVs built in America could top 3 million this year. Tesla could build as many as 2 million of those. And there is a price war among EV manufacturers. Some vehicle prices have dropped almost 20%. EV manufacturers are willing to sacrifice margins as they race for critical market share.