Lucid Group (LCID) is not done with bad news.
The Californian luxury electric vehicle maker, which started car production five months ago, has still not found a way to solve its production problems.
And it's not sure things will get any better anytime soon. In any case, this is the message sent Monday by Lucid Group during its fourth quarter earnings release.
The electric car manufacturer has significantly lowered its main production target.
Lucid Motors
What Can Consumers Expect?
The company now expects to produce only between 12,000 and 14,000 cars for 2022, according to a press release, a drop of 30% to 40% less than its initial forecast of 20,000 units.
The new numbers reflect supply chain issues and bottlenecks, Lucid Group said.
"This reflects the extraordinary supply chain and logistics challenges we've encountered and our unrelenting focus on delivering the highest-quality products," said Peter Rawlinson, Lucid's CEO and chief technology officer.
Lucid is learning the hard way that making cars is no easy feat: Technique or innovation does not guarantee that the runner will cross the finish line without hitting one.
But sometimes the athlete hits the hurdle and loses balance, but does not fall and stays the course. This may be the case with Lucid.
Lucid started the production only at the end of September. The company and its stylish, clean-lined sedans are considered strong rivals to Tesla (TSLA) and its luxury models, the Model S sedan and the Model X SUV.
Lucid currently produces only one model, the Lucid Air sedan, which has a base price of $77,400.
Lucid Motors
Focus on The Long Term
The company plans to deliver expensive versions of this sedan at some point this year: the Lucid Air Grand Touring and Lucid Air Touring, base-priced at $139,000 and $95,000 respectively.
Lucid explained that it managed to deliver 125 cars to customers in the fourth quarter, with total production exceeding 400 vehicles to date and over 300 deliveries to customers.
Lucid, which went public in July through a special purpose acquisition company (SPAC) deal, has also taken over 25,000 customer reservations as of today, reflecting potential sales of more than $2.4 billion.
Revenue was $26.4 million in the fourth quarter.
However, Lucid has tried to reassure consumers of its ability to increase production rates. In particular, the automaker said its plan to expand its one and only factory in Casa Grande, Arizona, was still on track.
"The Company confirmed its 2.85M [million] square foot expansion of the Casa Grande, Arizona manufacturing facility is on track," the statement read.
"We are at the precipice of a global transition toward electric vehicles, and Lucid, with our leading technology and design, is at the forefront of one of the most significant transformations in mobility in generations," Rawlinson said.
More Bad News Already
The bad production news comes on top of the recall a few days ago of most Lucid Air sedans in circulation for a safety issue.
"[Lucid Group] is recalling 203 model-year 2022 Lucid Airs because of the possibility that the front strut dampers were assembled improperly by a supplier," a spokesperson told TheStreet in an email statement. at the time. "Lucid is not aware of any instances of strut-damper failure in a vehicle."
But Rawlinson said in his remarks this week that investors should focus more on the long term rather than the short term.
He explained that Lucid is currently laying the foundations of a quality-oriented company that will undoubtedly pay dividends later.
"As we continue to put our cars into customers' hands, we are more confident than ever that we're building a quality foundation on which we can scale this business," he said. "We're thrilled to have been awarded the 2022 MotorTrend Car of the Year, and customers are telling us just how much they love this car."
Lucid Motors
Rawlinson also said that the firm has a strategy of making improvements to the car without waiting for outside influences or other negative feedback.
"Lucid Air's 500-plus miles of range has been independently validated under real-world conditions, even at a steady 70 mph, replacing range anxiety with range confidence," he said.
"We believe that the unique fusion of a dynamic driving experience, interior space and comfort, range, fast charging and performance is simply unparalleled. Additionally, our software over-the-air updates continue to enable an ever-improving ownership experience."
