Lucid sees disappointing electric vehicle production in 2023 as orders fall amid weaker demand

Feb 22 (Reuters) – (This February 22 story has been corrected to change the period to Q3 from Q2 in paragraph 8)

Lucid Group Inc (LCID.O) on Wednesday forecast 2023 production well below analysts’ expectations and reported a sharp drop in orders during the fourth quarter amid weaker demand, sending shares of the electric car maker by 11% after hours.

The Newark, Calif.-based company, which was already battling supply chain and logistics issues and struggling to deliver cars, has been hit by aggressive price cuts triggered by Tesla Inc (TSLA.O) that have diverted consumers from its luxury cars amid rising interest rates. and runaway inflation.

“There’s a lot more competition than there was a year ago…a lot more electric vehicles are becoming available at lower prices than the Lucid Air vehicle,” said CFRA Research analyst Garrett Nelson. “There is probably a lot of frustration among customers who have to wait so long to get the vehicles they ordered.”

Lucid said it plans to produce 10,000 to 14,000 luxury electric vehicles this year. Analysts on average expected the company to make 21,815 cars, according to Visible Alpha.

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The company, backed by Saudi Arabia’s sovereign wealth fund, Public Investment Fund, delivered 4,369 cars last year, well below the 7,180 units it produced.

“We moved past major bottlenecks limiting manufacturing, but that had some impact on the demand we generated early on, and that was exacerbated by the challenging macro environment,” Lucid CEO said. , Peter Rawlinson, on a call with analysts, after the company reported fourth-quarter revenue that fell short of expectations.

Price cuts by Tesla and Ford Motor Co (FN) have made it harder for rivals such as Rivian Automotive Inc (RIVN.O) and Lucid to take stake in an industry competing for shrinking consumer wallets.

Lucid said it had more than 28,000 orders as of Feb. 21, down 6,000 reservations from the third quarter, after delivering about 1,900 vehicles and seeing cancellations. This is despite the fact that Lucid offered a $7,500 discount on February 9 for purchases of certain variants of the Air sedan before March 31.

Chief Financial Officer Sherry House said Lucid will not release quarterly booking numbers going forward.

This year, the company will focus on improving production and deliveries, and will “vigorously and comprehensively” look at reducing operating and manufacturing costs.

House said Lucid would incur capital expenditures of between $1.5 billion and $1.75 billion in 2023. That’s a 40% jump from 2022, but well below analyst expectations of 2.24. billions of dollars.

Lucid reported a cash balance of $1.74 billion in the fourth quarter, after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves.

Revenue reached $257.7 million in the quarter ended Dec. 31, from $26.4 million a year earlier. Analysts on average had expected sales of $302.6 million, according to IBES data from Refinitiv.

The company’s net loss narrowed to $472.6 million, or 28 cents per share, from a loss of $1.05 billion, or 64 cents per share, a year earlier.

Shares of Lucid fell 10.6% in extended trading. The stock fell 82% last year after Lucid halved its production forecast due to supply chain issues.

Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Shinjini Ganguli, David Gregorio, Lincoln Feast and Leslie Adler

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