Lucid Group announced financial results for the first quarter of 2023, and investors will be struggling to find some good news in the report.
The EV startup posted a first-quarter net loss of $780 million (from $604.6 million a year earlier), despite revenue of $149.4 million in the same period. This is a clear sign that the company is burning through cash amid declining demand for its Lucid Air luxury electric sedan, which starts around $90,000.
As a result, Lucid cut its 2023 production forecast to "more than 10,000 vehicles" from its previous estimate of 10,000-14,000 vehicles.
Another sign of waning demand is that Lucid delivered only 1,406 vehicles in Q1 despite building 2,314 units during the same period – and this discrepancy between production and deliveries has been going ever since Lucid manufactured its first Air EV in September 2021.
For example, Lucid delivered 4,369 cars in 2022, far below the 7,180 units it produced during the year. Back to the Q1 2023 results, the automaker says it ended the quarter with approximately $4.1 billion total liquidity, which is enough to fund it "at least into the second quarter of 2024."
"We are on track to produce over 10,000 vehicles in 2023, with company-wide initiatives ongoing that will enable Lucid to pivot to higher volumes as market conditions allow."
Peter Rawlinson, Lucid's CEO and CTO
Gallery: 2023 Lucid Air Touring
Rawlinson added that Lucid expects to unveil its second vehicle, the Gravity SUV, later this year and to start accepting reservations, with production of the three-row SUV on schedule to start in 2024.
The thing is the Gravity will likely be as least as expensive as the Air sedan, and while SUVs are more popular than sedans, it remains to be seen if Lucid will find enough customers for it to turn the tables around from a financial perspective.
Lucid's CEO said on the earnings call that the automaker is seeing success in raising brand awareness as it looks to find more buyers for the Air sedan.
"We're seeing some early wins. The number of test drives has nearly doubled in the first quarter from the fourth quarter of last year," Rawlinson said of the Lucid's increased focus on marketing, according to Reuters.
Speaking of marketing, the company announced on the earnings call that Andrea Soriani is its new head of marketing. The executive previously held marketing roles at TAG Heuer and Maserati of North America.
Also during the call, Lucid CFO Sherry House said Lucid is not making public its order backlog – despite doing so in the past. The disappointing Q1 2023 numbers sent the automaker's stock down nearly 9 percent in extended trading.
