If there is one key metric that shows an EV company can survive, it is unit sales growth. Among US manufacturers, the only exception is Tesla (NASDAQ: TSLA | TSLA Price Prediction) because of its size and portability. Lucid (NASDAQ: LCID) failed that test, as its first-quarter deliveries and production fell well below expectations. In the US market, where EV sales have weakened (except perhaps for used EVs), its future is not beyond grim.
Lucic delivered a remarkably small number of vehicles in Q1, at 3,903. It produced 5,500. The company blamed much of this on a supplier’s lack of inventory, which cost it 29 days of “disruption.” It affirms that its production will be 25,000 to 27,000 units this year. That is still extremely small. Lack of sales has driven Lucid’s stock down 56% over the last year, while the S&P 500 is 30% higher.
It is easy to say that Lucid’s problems are simply financial, although it loses billions of dollars a year. The figure was a loss of $3.7 billion last year.
Lucid has to show demand for its extremely expensive vehicles. It cannot sell fewer than 4,000 vehicles and even pretend this is sustainable. It is hard to do the math, but Lucid would need to sell tens of thousands of its cars to break even. Approximately 26,000 is not enough
It is also hard to find a niche where Lucid can do well. The $70,000 to $90,000 level child tier is crowded. They include major companies such as BMW, Mercedes, and Lexus. These and several more have large foot leader prints, huge brand equity, and a strong balance sheet
The place where Lucid lacks a future is not just financial. It has already been elbowed out of the market.
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