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No Secret Why Lucid Cut Production Forecast for 2022 Despite Strong Demand

Newark, California-based electric automaker Lucid reported this week deliveries of 679 electric vehicles during the last quarter, generating $97.3 million (95.7 million euro) and bringing the total deliveries for this year to 1,405.
Lucid. Air 6 photos
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The company reported strong demand for its Lucid Air model. They are currently sitting on over 37,000 reservations for the longest-range, fastest-charging vehicle on the market today, representing approximately $3.5 billion (3.44 million euro) in gross revenue.

“Our Q2 revenue was $97.3 million, primarily driven by higher customer deliveries of Lucid Air vehicles. We continue to have a strong balance sheet, closing the quarter with $4.6 billion cash, cash equivalents and investments, which we believe is sufficient to fund the Company well into 2023,” stated Sherry House, Lucid’s CFO.  

In normal times, an automaker would be overly thrilled to have 37,000 outstanding orders for its product, but times are far from normal in automotive manufacturing. Production, and ultimately sales, is now impacted by supply chain issues, most notably semiconductor component shortages.

History traces just-in-time (JIT) inventory management to Henry Ford in the early 1900's. Since that time, automotive manufacturers have used JIT to save costs by only carrying inventory that is used immediately, or in a 24-hour production window, for example.

JIT is a very cost-efficient approach to manufacturing when component suppliers have enough product and transit times are predictable and consistent. In the wake of the pandemic dating back over two years, neither of these conditions exist today to any degree of reliability.

We are now in not-in-time (NIT) conditions, where both supply and logistics issues are reaping havoc on production lines all over the world. As a result Lucid has cut its production forecast to 6,000-7,000 vehicles for 2022 as it struggles to navigate the NIT environment. Pretty much like all other carmakers do in this day and age.

press release

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