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Lucid Significantly Slashes 2022 Production Forecast

Lucid is one of the companies that is expected to take on Tesla and yet there’s little evidence this would be the case. Lucid Air deliveries reached a few hundred units since the start of production last fall and were expected to get to 20,000 units produced in 2022. The ambitious plan has fallen apart though, as Lucid confirmed the production forecast was cut by as much as 40%. Lucid shares have plummeted since the announcement.
Lucid significantly slashes 2022 production forecast 7 photos
Lucid shares plummetRender of Lucid's Saudi Arabia future plant2022 Lucid AirLucid Air electric sedanLucid Air electric sedanLucid Air electric sedan
Lucid Air is a promising luxury sedan, despite its rather prohibitive price of $169,000. Supply chain problems forced the company to slash production expectations to between 12,000 and 14,000 vehicles, down from the expected 20,000.

Surprisingly, Lucid CEO said the problems have nothing to do with the chip shortage. Instead, it’s the mundane parts such as glass and carpet that are keeping the Lucid factory lagging behind schedule. The carmaker's shares have lost 14% in the after-hours trading following the announcement.

Lucid relies on around 250 suppliers to provide the parts needed for Air’s production, and a couple of them experienced quality problems. These quality problems prevent ramping up the production to the levels needed for executing the company’s plans. According to Lucid CEO Peter Rawlinson, the problems will push back the second model’s production to 2024. Lucid initially announced that an SUV would join the Air sedan in the lineup starting next year. Although a name for the new model has not been announced, it is internally referenced as “Project Gravity.”

This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest quality products,” Rawlinson said in a statement. “We remain confident in our ability to capture the tremendous opportunities ahead given our technology leadership and strong demand for our cars.”

Lucid recently announced plans to open a new factory in Saudi Arabia. At first, the new factory will assemble vehicles based on pre-manufactured kits imported from the U.S. Later on, there is a real possibility the manufacturing operation will extend around the future King Abdullah Economic City (KAEC) facility.

 
 
 
 
 

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