Lucid Maintains Production Guidance Despite Underwhelming Q2 Results

While Q2 revenue and net loss missed market estimates, Lucid said it has enough cash to start production of Gravity SUV in late 2024.

Lucid Air with Stealth Appearance package

Dan Mihalascu

By: Dan Mihalascu

Aug 8, 2023 at 5:29am ET

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Lucid Group posted its Q2 2023 financial results on August 7, announcing that it maintains its production goal for the year and has enough cash to launch the Gravity SUV next year.

Lucid posted Q2 revenue of $150.9 million, 55 percent higher than in Q2 2022, driven by customer deliveries of 1,404 vehicles in the quarter, largely the same as in the first quarter. Production fell 6 percent from the first quarter at 2,173 cars. Still, the EV startup said it remains on track to build more than 10,000 vehicles this year; in the first half of the year the company built 4,487 vehicles and delivered only 2,810.

The second-quarter net loss widened to $764.2 million from $555.3 million during the same quarter last year. Both the Q2 revenue and net loss missed market estimates.

The company said it had $6.25 billion in total liquidity as of June 30, 2023, which is expected to take Lucid through the start of production for the Lucid Gravity in late 2024, and into 2025. The strong liquidity is due to the $3 billion stock offering in June led by its majority owner, Saudi Arabia's Public Investment Fund (PIF).

Speaking of Saudi Arabia, Lucid said it initiated material shipments of vehicles to the country and that it finalized the purchase agreement with the Government of Saudi Arabia. The deal for 50,000 vehicles with the option for an additional 50,000 was first announced in April 2022.

2023 Lucid Air Touring

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2023 Lucid Air Touring

The second half of the year promises to be eventful for Lucid when it comes to product launches, as noted by CEO Peter Rawlinson.

"We look forward to exciting new products in the second half of this year, including the planned start of production of the Lucid Air Sapphire and the Lucid Air Pure Rear Wheel Drive, plus the highly anticipated unveiling of our new SUV, Lucid Gravity, forthcoming in November."

He added that Lucid achieved several major milestones in Q2 2023, including signing agreements to enter into a long-term strategic partnership with Aston Martin – the first such partnership for Lucid Group's technology arm. The contracts are worth in excess of $450 million.

Finally, Lucid mentioned the recent price cuts for the Air Pure, Air Touring, and Air Grand Touring, which are expected to increase sales. The company also expects a sales boost from the launch of new Air trims – Air Pure RWD and Air Sapphire – as well as the shipment of first partially assembled vehicle kits to its Saudi Arabia plant.

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On the earnings call, Rawlinson said Lucid is willing to adjust prices further to stimulate sales, marking a change of strategy compared to the start of the year.

"We're always willing to adjust to market conditions. I think that's very important to retain that flexibility. The key is to get product out into the wild in customers' hands. That's the best marketing tool we've got," Rawlinson said. “We are limited by our ability to sell the cars right now, and that is my key focus," he told Reuters.