Lucid Motors Warns of Possible Price Increases in the Future, Hikes Won’t Affect Reservations

Lucid Motors is the latest in a series of automakers that have admitted to being under significant inflationary pressures pertaining to raw materials and components.

On Thursday, Lucid CEO Peter Rawlinson said the company may be forced to raise the prices of its cars due to “huge inflationary pressures,” but promised that any hikes will not affect existing reservation holders — reports Yahoo Finance.

“There’s an inevitability that we will have to look at the price points of models that are coming out in the future,” Rawlinson told Reuters during an interview at the South by Southwest music, technology, and film festival (SXSW).

“I think it would be absolutely foolish of me to say we’re never going to raise our prices,” Rawlinson added, referring to nickel prices, which have surged in recent weeks and stand to inflate electric vehicle (EV) prices in general since most use a high volume of nickel for their batteries.

On Sunday, Tesla CEO Elon Musk said the EV pioneer was “seeing significant recent inflation pressure in raw materials and logistics.” Wedbush analyst Daniel Ives on Monday predicted that Tesla would increase prices in the “next two weeks,” and a lineup-wide price hike from Tesla came the same day.

Making existing reservations invulnerable to price hikes is certainly the right move. As a startup with only a little over 400 cars delivered so far, Lucid would surely want to avoid the bad press and consumer wrath Rivian Automotive was subjected to earlier this month when it hiked pricing for its electric offerings and revised total costs for pre-orders accordingly.

Last month, Lucid announced it would cut its production forecast for this year down from its original target of 20,000 vehicles to 12,000-14,000, citing “extraordinary supply chain and logistics challenges.”

Rawlinson on Thursday shed some light on the move, noting that the bottlenecks were primarily caused by suppliers for windshield glass, carpeting, and some exterior trim parts.

“It’s about a handful suppliers that are gating our volume,” said the Lucid CEO. “I’m super frustrated because we’re not gated by silicon chips, we’re not gated by our ability to make electric motors.”

Switching to different suppliers for these components is unfortunately not an option for the company, said Rawlinson, since that could compromise quality.

“Customer satisfaction and recognition of the quality trumps short-term myopic attention to how many cars we have delivered to customers in a quarter,” he said, adding that he was working on a 10-year plan.

At the beginning of this year, Lucid Motors confirmed it would be launching in Europe sometime in 2022.