Lucid Posts Larger Loss as Demand Concerns Linger, Assures Enough Funds to Last Until 2024
Lucid Motors, the American electric vehicle manufacturer, has announced worse-than-expected Q1 2023 earnings, confirming the negative impact of the pandemic on the vehicle market. The company, however, asserts that it has enough cash to last until 2024, despite the lingering concerns over the demand for its vehicles.
The Redwood City, California-based automaker reported a net loss of $529 million in Q1 2023, or $3.79 per share, compared to a net loss of $316 million, or $2.84 per share, in Q4 2022. The Q1 revenue came in at $22 million, a significant drop from $47.7 million in the previous quarter.
Lucid, which went public through a special purpose acquisition company (SPAC) deal in July 2021, said it has $5.6 billion in cash, equivalents, and restricted cash. The company furthermore noted that it expects to achieve positive cash flow next year.
Lucid CEO Peter Rawlinson said in a statement that “Given the exceptional circumstances in which we are operating, our first-quarter results were in line with our expectations. We’re continuing to execute our strategy and build momentum as we work to deliver on our key priorities, including the continued ramp-up of production at our Arizona factory.”
Rawlinson added that Lucid has made significant progress in 2022 and has received positive feedback from customers, with strong interest in its recently launched Lucid Air Dream Edition, which has a price tag of around $169,000.
The Lucid Air Dream Edition is the company’s first car to go into mass production and is rated as one of the best electric vehicles available in the market. The Dream Edition offers a driving range of up to 520 miles per charge, among the longest of any electric vehicle on the market.
Despite the impressive specifications, concerns remain over the demand for the vehicles. Following the announcement of Lucid’s Q1 earnings, the share price fell by over 7%. Some analysts have been skeptical that Lucid can meet its ambitious targets of selling 20,000 vehicles in 2022 and 50,000 in 2023, given the competitive electric vehicle market and the current supply chain disruptions.
In 2021, Lucid’s main rival, Tesla, sold over 900,000 electric cars, while other established automakers like Ford, GM, and Volkswagen are also increasing their production of electric vehicles.
In conclusion, Lucid’s Q1 earnings resulted in a wider-than-expected loss, and concerns over demand for the company’s vehicles remain. Nevertheless, the company’s CEO reassured investors that Lucid has enough funds to sustain operations until 2024, and plans to achieve positive cash flow next year. The market will be closely monitoring Lucid’s progress as it continues to ramp up production and navigate the competitive electric vehicle market.