A company trying to gain a toehold in the burgeoning EV space has had to cut production estimates by nearly half for the remainder of 2022.
Supply chain woes continue to plague automakers including one of Tesla’s (TSLA) – Get Tesla Inc. Report rivals in the race to increase the number of electric vehicle owners.
Lucid Motors (LCID) – Get Lucid Group Inc. Report has faced roadblocks in increasing its production of its lineup of luxury cars and reported delivering only 679 vehicles during the second quarter.
The California EV manufacturer also slashed its target for the number of vehicles it can produce for 2022 by almost 50% to 6,000 to 7,000 instead of its previous estimate of 12,000.
The company’s cut in production stems from “extraordinary supply chain and logistics challenges we encountered,” said Peter Rawlinson, Lucid’s CEO and CTO in a statement. “We’ve identified the primary bottlenecks, and we are taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization.”
Auto manufacturers have faced a series of challenges during the pandemic as demand skyrocketed, but the supply of semiconductor chips and other parts became constrained.
Customer Demand Remains High
Demand for the company’s vehicles remains high with 37,000 customers who made reservations with potential sales of approximately $3.5 billion, Rawlinson said.
He remained upbeat and said the challenges were merely “near-term,” Rawlinson said.
The company reported revenue of $97.3 million in the second quarter on deliveries of 679 vehicles, compared to delivery of 360 during the first quarter. Lucid reported first half production of 1,405 vehicles.
The EV maker reported $4.6 billion of cash and investments on hand, which it says is sufficient to fund manufacturing for 2023.
The startup company delivered its first car in October 2021 and is targeting a higher end EV market.
The cheapest model, the Lucid Air, sells for at least at $87,400 while the most expensive one goes for $169,000. One attractive feature of the Lucid Air is that it has a range of 500 miles from one charge.
The battery-powered luxury car market is becoming more competitive as well-know automaker such as Audi, Porsche and Mercedes-Benz are selling their own premium models.
Lucid’s Previous Commitment
Investors in startup automakers such as Lucid, whose main shareholder, Saudi Arabia’s sovereign wealth fund Public Investment Fund, owns a 62% stake, and Rivian (RIVN) – Get Rivian Automotive Inc. Report may have to wait for their market share to increase.
Other competitors are becoming more popular among consumers and increasing sales. Ford Motor (F) – Get Ford Motor Company Report said on Aug. 3 it increased sales of battery-powered vehicles by 170% from last year, selling 7,700 cars and trucks. During the first seven months of 2022, the company sold 31,000 EVs.
In May, Lucid confirmed its goal of producing between 12,000 and 14,000 vehicles in 2022. Its production target was was even higher originally – back in February, the EV maker dropped its production target from 20,000 to between 12,000 and 14,000 vehicles in 2022.
Lucid increased the prices of its vehicles starting June 1 and will increase between 10% and 12%, depending on configuration.
The company produces the Lucid Air Sedan which comes in several configurations, including the Lucid Air Dream Edition, Lucid Air Pure, Lucid Air Grand Touring.