Photo: Tesla Owners Silicon Valley via Youtube
As Musk’s image goes from techno-genius to social engineer and even way deeper than that, he continues to think of himself as some sort of a messiah. Having already warned Lucid and Rivian of the potential perils lying ahead, he’s now convinced that the electric luxury sedan maker is doomed.
Elon Musk has shown that he doesn’t consider established carmakers a threat to Tesla’s dominance in the EV market. Technically, if we are to take Musk’s early words for granted, the more electric vehicles will flood the market, the better for Earth and humanity. Nevertheless, he constantly felt insecure as more startups raised money and produced their own electric cars.
Part of his insecurity probably comes from the fact that some of these startups were founded by former Tesla employees. It makes sense, considering that Tesla pioneered the EV revolution. It makes less sense that Musk tried to cancel these people as former Tesla employees. One good example is Lucid’s CEO, Peter Rawlinson. Musk made a fool of himself after claiming that Rawlinson was never Tesla’s chief engineer. Then, during the Cyber Rodeo event in spring, Rawlinson makes a cameo appearance in a video depicting the company’s beginnings.
We’re unsure whether this is related to Musk’s general skepticism about other rivals’ chances of success. Tesla’s controversial CEO has previously warned Lucid and Rivian that they were “tracking toward bankruptcy.” The warning wasn’t entirely unwarranted, considering that both companies encountered rough waters during 2022.
But then again, Tesla wasn’t spared either. Despite a stellar year in production and deliveries, Tesla shares have finally started to earn money for short-sellers. And instead of “buying the deep,” investors seem to have followed Musk and sold stock at an alarming rate. Currently, Tesla stock is at its lowest level since 2020, down more than 50% compared to the all-time high of November 2021. That was right before Musk started his Twitter madness. But we digress.
Of the two companies that Musk bashed, Rivian stands on a pile of money, and although it is burning them at an alarming rate, it still has powerful backers to keep the lights on. On the other hand, Lucid is in a much more precarious situation. Its backlog has been shrinking for the past months, and Lucid even sells cars from existing inventory now.
It’s not a very good sign for an EV startup, and Lucid might run out of steam if it doesn’t take urgent measures to keep customers interested. And no, annoying them with countless calls when they try to cancel their orders would not help. Nobody willing to pay $150,000 for a perfectible electric vehicle would put up with that. Lucid also promised a 10% discount to customers who ordered an Air Grand Touring after the prices were increased to complete their order, which makes this a carrot-and-stick situation.
Nevertheless, Elon Musk was not impressed, and precisely this measure prompted him to predict Lucid’s downfall for the second time. “They are not long for this world,” said Musk in reply to Tesla Canada sharing the news about Lucid’s struggles to retain customers. Discounts might keep a few customers, but it sure doesn’t help a company make ends meet during times of economic distress.
It was the high materials and component costs that prompted Lucid’s decision to raise prices. As a CEO who went through similar situations, Elon Musk knows that paying your suppliers more and charging customers less is not a recipe for success. Especially in the early stages of production ramp-up, when money is tight and costs are high, discounts would not convince people that your product is worthy of their money.
Offering more affordable cars is a better way, and Lucid is in the process of achieving this with the Air Pure. Nevertheless, the Air Pure is still only available in dual-motor configurations. The most affordable version, priced at $87,400, is still months away from starting production. But how can Lucid sell the Air at this price?
The lower price point should come from the economy of scale since Lucid wouldn’t want to skimp on Lucid’s Air Pure’s quality. Taking out equipment will only help so much with lowering the price. Nevertheless, Lucid is still far from achieving economy of scale with the Air, which creates a circle that CEO Rawlinson needs to break while he still has money in the coffers. Otherwise, he’ll only prove Musk right.
Part of his insecurity probably comes from the fact that some of these startups were founded by former Tesla employees. It makes sense, considering that Tesla pioneered the EV revolution. It makes less sense that Musk tried to cancel these people as former Tesla employees. One good example is Lucid’s CEO, Peter Rawlinson. Musk made a fool of himself after claiming that Rawlinson was never Tesla’s chief engineer. Then, during the Cyber Rodeo event in spring, Rawlinson makes a cameo appearance in a video depicting the company’s beginnings.
We’re unsure whether this is related to Musk’s general skepticism about other rivals’ chances of success. Tesla’s controversial CEO has previously warned Lucid and Rivian that they were “tracking toward bankruptcy.” The warning wasn’t entirely unwarranted, considering that both companies encountered rough waters during 2022.
But then again, Tesla wasn’t spared either. Despite a stellar year in production and deliveries, Tesla shares have finally started to earn money for short-sellers. And instead of “buying the deep,” investors seem to have followed Musk and sold stock at an alarming rate. Currently, Tesla stock is at its lowest level since 2020, down more than 50% compared to the all-time high of November 2021. That was right before Musk started his Twitter madness. But we digress.
Of the two companies that Musk bashed, Rivian stands on a pile of money, and although it is burning them at an alarming rate, it still has powerful backers to keep the lights on. On the other hand, Lucid is in a much more precarious situation. Its backlog has been shrinking for the past months, and Lucid even sells cars from existing inventory now.
It’s not a very good sign for an EV startup, and Lucid might run out of steam if it doesn’t take urgent measures to keep customers interested. And no, annoying them with countless calls when they try to cancel their orders would not help. Nobody willing to pay $150,000 for a perfectible electric vehicle would put up with that. Lucid also promised a 10% discount to customers who ordered an Air Grand Touring after the prices were increased to complete their order, which makes this a carrot-and-stick situation.
Nevertheless, Elon Musk was not impressed, and precisely this measure prompted him to predict Lucid’s downfall for the second time. “They are not long for this world,” said Musk in reply to Tesla Canada sharing the news about Lucid’s struggles to retain customers. Discounts might keep a few customers, but it sure doesn’t help a company make ends meet during times of economic distress.
It was the high materials and component costs that prompted Lucid’s decision to raise prices. As a CEO who went through similar situations, Elon Musk knows that paying your suppliers more and charging customers less is not a recipe for success. Especially in the early stages of production ramp-up, when money is tight and costs are high, discounts would not convince people that your product is worthy of their money.
Offering more affordable cars is a better way, and Lucid is in the process of achieving this with the Air Pure. Nevertheless, the Air Pure is still only available in dual-motor configurations. The most affordable version, priced at $87,400, is still months away from starting production. But how can Lucid sell the Air at this price?
The lower price point should come from the economy of scale since Lucid wouldn’t want to skimp on Lucid’s Air Pure’s quality. Taking out equipment will only help so much with lowering the price. Nevertheless, Lucid is still far from achieving economy of scale with the Air, which creates a circle that CEO Rawlinson needs to break while he still has money in the coffers. Otherwise, he’ll only prove Musk right.
They are not long for this world
— Elon Musk (@elonmusk) December 9, 2022
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