Lucid Misses The Mark

Lucid Misses The Mark

Tesla’s CEO, Elon Musk criticized competing electric startup, Lucid Motors. In a dismissive tweet, the controversial Tesla boss had a dig at one of his oncoming competitors. After Lucid Motors failed to meet its production and revenue targets at the end of June, outspoken Tesla creator Elon Musk poked fun at one of his potential competitors in the electric vehicle market.

Despite claiming to have more than 37,000 bookings, the EV start-up drastically underperformed on its second-quarter estimates for both sales and revenue, delivering just 679 cars. US financial analyst, Gary Black, highlighted there is a $US50 million shortage in Lucid's quarter revenue and Musk quickly threw in a quip.

“I had more kids in Q2 than they made cars!,” Musk replied to the tweet, which was a reference to Musk fathering multiple children with multiple partners over the last year.

Musk is more knowledgeable than most about the challenges involved in making electric vehicles. Many of Tesla's anticipated manufacturing schedules, including the star product, the Cybertruck, have had to be rescheduled a few times.

Lucid Air Interior

The luxury Air vehicle, which starts at $US87,400, is the focus of concerns at Lucid Motors, managed by former Tesla employee Peter Rawlinson. Rawlinson published a statement on the company’s website:

“Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. 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. We continue to see strong demand for our vehicles, with over 37,000 customer reservations, and I remain confident that we shall overcome these near-term challenges.”

Nevertheless, Lucid Motors has now revised its previous expectation for full-year production at its Arizona factory from 12,000–14,000 automobiles to 6,000–7,000 cars. It stated in February that it would produce between 12,000 and 14,000 automobiles in 2022 as opposed to the initial projection of 20,000. It named a new senior executive to head operations and dropped its full-year deliveries target for the second time, stating it now anticipates delivering just 6,000 to 7,000 vehicles in 2022.

Following the news, shares of Lucid decreased by nearly 12% in after-hours trading. The news coincided with Lucid's release of its second-quarter financial figures, which showed revenue of $97.3 million, a loss per share of 33 cents, and a total of 679 vehicles delivered.

Earlier this year, Lucid attributed the decline to problems with the semiconductor chip supply chain as well as shortages of basic materials like glass and carpet. The corporation had to deal with new bottlenecks, according to Rawlinson, as a result of the company's efforts to resolve the supply-chain problems. Lucid is currently bringing shipping and other services in-house, according to Rawlinson, “It really unveiled the next level of challenges, the immaturity of our logistics systems.”

Steven David, a former employee of Stellantis, has been hired by Lucid as its senior vice president of operations to assist solve the problems. He will be in charge of the organization's manufacturing, logistics, and quality-control initiatives.

The company's 37,000 bookings, according to CFO Sherry House, do not include any for the impending Gravity SUV or any of the vehicles that the Saudi Arabian government has ordered. In April, Lucid said that the Saudi Arabian government has agreed to purchase up to 100,000 of their automobiles over the following ten years. A significant shareholder in Lucid, owning over 62 percent of the company's shares, is the nation's public wealth fund.

As of the end of the second quarter, Lucid had $4.6 billion in cash and equivalents, down from $5.4 billion at the end of March, but still enough to support operations in 2023, according to the CFO.