Brand new Lucid electric cars sit parked in front of a Lucid Studio showroom in San Francisco on May 24, 2024.
Justin Sullivan | Getty Images
DETROIT – Lucid Group (LCID) finds itself under pressure, reporting a second consecutive quarter of missed Wall Street expectations. The electric vehicle (EV) maker continues to grapple with the complexities of launching its highly anticipated Gravity SUV, facing a confluence of challenges from supply chain bottlenecks to softening EV demand.
The company has revised its annual production guidance downwards for the second time this year, now projecting around 18,000 vehicles, a retreat from the initial target of 20,000 units. Capital expenditure expectations have also been trimmed by $100 million, settling between $1 billion and $1.2 billion.
Here’s a breakdown of Lucid’s performance in the third quarter, compared against consensus estimates:
- Loss per share: $2.65 adjusted vs. an expected loss of $2.27
- Revenue: $336.6 million vs. an expected $379.1 million
Lucid’s net loss for the quarter reached $978.4 million, or $3.31 per share, compared to $992.5 million, or $4.09 per share, in the same period last year. After adjusting for one-time restructuring items, the loss amounted to $2.65 per share.
Adjusted EBITDA reflected a loss of $717.7 million, exceeding the StreetAccount consensus estimate of a $597.4 million loss. This represents a 17% year-over-year widening of losses. While quarterly revenue saw a substantial increase of roughly 68% from $200 million a year prior, it still fell short of analysts’ projections.
Alongside the earnings release, Lucid announced an agreement to expand its delayed draw term loan credit facility with Saudi Arabia’s Public Investment Fund (PIF), the company’s majority shareholder, from $750 million to approximately $2 billion. This injection of capital underscores PIF’s continued commitment to Lucid’s long-term vision.
The company reported total liquidity of $5.5 billion at the end of the quarter, including the undrawn credit line, providing a financial runway into the first half of 2027. Cash and cash equivalents remained relatively stable at $1.6 billion compared to the end of last year.
Lucid is actively exploring additional financing options beyond PIF as it gears up for the Gravity SUV launch and the development of a new midsize vehicle, slated for production no earlier than late next year. This diversification of funding sources is crucial for sustained growth and mitigating reliance on a single investor.
An autonomous robotaxi from Uber’s partnership with Lucid and autonomous vehicle startup, Nuro.
Courtesy: Nick Twork | Lucid
Interim CEO Marc Winterhoff acknowledged the challenges surrounding the Gravity launch, stating the company is “intensely focused on ramping up production and addressing the significant supply chain disruptions impacting the entire industry.” Supply chain constraints, particularly for critical components, have been a persistent headwind for EV manufacturers across the board.
Despite these challenges, Winterhoff expressed optimism about significantly increasing Gravity deliveries in the fourth quarter. He also noted that this increase is regardless of ongoing supply chain issues and an industry-wide deceleration in EV demand.
CFO Taoufiq Boussaid confirmed that Gravity production has increased sequentially but remains at a relatively insignificant level, emphasizing the need for substantial ramp-up in the coming months.
These results follow the company’s report of 4,078 vehicle deliveries in the third quarter, a year-over-year increase but still shy of Wall Street expectations. This points to potential difficulties in translating reservations into actual sales amid increasing competition in the luxury EV segment.
Lucid has forged several strategic partnerships this year, most notably a deal with Uber. It is expected that Uber will acquire and deploy over 20,000 Lucid Gravity SUVs equipped with autonomous vehicle technology from Nuro. The company also announced an expanded partnership with Nvidia for advanced autonomous vehicle technologies, positioning Lucid at the forefront of self-driving capabilities. These partnerships could prove crucial factors for Lucid’s future success. By diversifying revenue streams and potentially incorporating its technology into robotaxi fleets, Lucid can offset some of the risks of relying solely on individual consumer sales of vehicles.
The performance of Lucid contrasts sharply with that of Rivian Automotive (RIVN), which recently reported better-than-expected earnings and revenue, driving the stock price up. This divergence highlights the varying degrees of success among pure-play EV companies in navigating the current market environment.
Rivian’s shares have gained roughly 16% year-to-date, while Lucid’s stock remains down more than 40%, even after a 1-for-10 reverse stock split implemented this summer. This disparity reflects investor sentiment and the market’s perception of each company’s outlook and execution capabilities.
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