Photo: Lucid Motors
Lucid Motors accelerated its losses in the second quarter as production and deliveries stalled. The recent price cuts will worsen its situation, but Lucid is far from terminally ill. Following a new financing round, the company has enough cash to survive its worst times.
No matter how Lucid tries to spin its second-quarter results, they show the picture of a sinking company. Not only has production surpassed deliveries, but Lucid is losing over half a million dollars with every car it sells. The company stopped reporting the number of reservations in 2023, mainly because there's nothing to report. Lucid has almost 5,000 vehicles in its inventory, adding about 800 new cars every quarter. That's the difference between production (2,173 units) and deliveries (1,404 units) in the second quarter.
At the same time, it burns through cash like there's no tomorrow, with a net loss in Q2 2023 surpassing $764 million. It's the second time this year that Lucid's future has been questioned following an equally disastrous first quarter. In May, Lucid reported a net loss of $780 million for the first quarter and almost the same number of cars delivered: 1,406 units. This is probably why the company offered production guidance in its shareholder deck but kept mum about its delivery estimates.
While the 10,000 production target seems reasonable at current levels, it's more important to understand how many of these cars will find a buyer. This is still a mystery, considering deliveries were stuck at 1,400 units a quarter in 2023. That's less than 6,000 units unless the EV startup fundamentally changes things. The recent price cuts announced last week could help, although they will accelerate Lucid's losses. The EV startup slashed the prices of the Air Sedan by as much as $10,000 in the case of the base Air Pure model.
Although all these figures look like they confirm Elon Musk's predictions (remember the "tracking towards bankruptcy" and "they're not long for this world" statements), the situation is not that bad. During the quarter, Lucid signed an agreement with Aston Martin to supply its electric drive components. In return, it will get not only cash but also a 3.7% stake in the British carmaker. This is not the first deal Lucid signed, as its performance drive units power every car in the Formula e championship. These partnerships will pay dividends further down the line.
This cements Lucid's place as a technology leader in the EV industry, and the company emphasizes the impressive efficiency of its drive units. The company's position will get firm support later this year when the Air Pure RWD and Air Sapphire will ship to customers. The former will likely make the most crucial difference in Lucid's revenues thanks to a more affordable price. The Gravity SUV will be unveiled in November but will not enter production until late 2024 at the earliest.
If you think this is too little, too late, you're wrong. Lucid Motors' financial position looks stronger than ever after the latest financing round filled its coffers with $3 billion. Lucid is sitting now on $6.25 billion of liquidity, which is expected to keep the company going through the start of production for the Lucid Gravity and into 2025. Let's not forget that Lucid Motors is backed by Saudi Arabia's PIF, and the Saudis have big plans for their (de facto) house carmaker.
At the same time, it burns through cash like there's no tomorrow, with a net loss in Q2 2023 surpassing $764 million. It's the second time this year that Lucid's future has been questioned following an equally disastrous first quarter. In May, Lucid reported a net loss of $780 million for the first quarter and almost the same number of cars delivered: 1,406 units. This is probably why the company offered production guidance in its shareholder deck but kept mum about its delivery estimates.
While the 10,000 production target seems reasonable at current levels, it's more important to understand how many of these cars will find a buyer. This is still a mystery, considering deliveries were stuck at 1,400 units a quarter in 2023. That's less than 6,000 units unless the EV startup fundamentally changes things. The recent price cuts announced last week could help, although they will accelerate Lucid's losses. The EV startup slashed the prices of the Air Sedan by as much as $10,000 in the case of the base Air Pure model.
Although all these figures look like they confirm Elon Musk's predictions (remember the "tracking towards bankruptcy" and "they're not long for this world" statements), the situation is not that bad. During the quarter, Lucid signed an agreement with Aston Martin to supply its electric drive components. In return, it will get not only cash but also a 3.7% stake in the British carmaker. This is not the first deal Lucid signed, as its performance drive units power every car in the Formula e championship. These partnerships will pay dividends further down the line.
This cements Lucid's place as a technology leader in the EV industry, and the company emphasizes the impressive efficiency of its drive units. The company's position will get firm support later this year when the Air Pure RWD and Air Sapphire will ship to customers. The former will likely make the most crucial difference in Lucid's revenues thanks to a more affordable price. The Gravity SUV will be unveiled in November but will not enter production until late 2024 at the earliest.
If you think this is too little, too late, you're wrong. Lucid Motors' financial position looks stronger than ever after the latest financing round filled its coffers with $3 billion. Lucid is sitting now on $6.25 billion of liquidity, which is expected to keep the company going through the start of production for the Lucid Gravity and into 2025. Let's not forget that Lucid Motors is backed by Saudi Arabia's PIF, and the Saudis have big plans for their (de facto) house carmaker.
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