Lucid Q1 Reports Growing Losses and Lingering Demand Uncertainty

Lucid Air

Electric vehicle maker Lucid Group announced widening losses for Q1 2023 but confirmed that it has enough cash to continue operations into 2024. The news resulted in shares dropping over 8% in after-hours trading.

“We are on track to produce over 10,000 vehicles in 2023, with company-wide initiatives ongoing that will enable Lucid to pivot to higher volumes as market conditions allow,” said Peter Rawlinson, Lucid’s CEO and CTO, in a statement.

Despite demand concerns, CEO Peter Rawlinson stated that the company remains on track to produce over 10,000 vehicles in 2023. Lucid had previously set a production goal of 10,000 to 14,000 vehicles for the year, back in February.

The company’s Q1 earnings report revealed a loss per share of 43 cents and a revenue of $149.4 million, lower than the expected revenue of $209.9 million. The reported net loss for the first quarter was $779.5 million, a significant increase from the $81.3 million net loss in Q1 2022. However, revenue did see a year-over-year jump to $149.4 million from $57.7 million.

“Our Q1 revenue was approximately $149 million, which represented a year-over-year increase of 159%. We ended the quarter with just over $3.4 billion in cash, cash equivalents, and investments, with total liquidity of approximately $4.1 billion, which we believe is sufficient to fund the Company at least into Q2 of 2024,” said Sherry House, Lucid’s CFO.

“Our mission and optimism are unchanged. We are committed to an environmentally sustainable future – designing, building, and delivering the best EVs on the market,” added House.

In an effort to conserve cash, Lucid announced plans to cut about 18% of its workforce, approximately 1,300 workers, in March.

The company’s 2023 production target for the Lucid Air sedan is notably below the more than 28,000 reservations recorded as of its Q4 earnings report in February. Lucid produced 2,314 Air sedans in Q1 but only delivered 1,406 to customers, attributing the gap to a slow January and changes to the U.S. government’s EV tax credits.

In Q4 2022, Lucid produced 3,493 vehicles and delivered 1,932 cars. The numbers are down across the board for Q1 2023.

Lucid did not provide an updated reservation number, further raising demand concerns. The company plans to reveal its upcoming electric SUV model, Gravity, later this year, with production slated to begin in 2024.

Tesla CEO Elon Musk commented on Lucid’s Q1, saying “Prototypes are easy, production is hard and achieving positive cash flow is excruciating.”

Lucid lost over $550,000 per car delivered in the first quarter. Ouch.