After posting a second-quarter net loss of $764.2 million, Lucid Motors reiterated its 2023 production goal of 10,000 Air sedans after delivering 2,810 in the first half of the year.
Lucid Motors expects better sales in the second half through price cuts, deliveries to Saudi Arabia and the launch of new versions of its sole vehicle, the Air sedan, executives said Monday.
CEO Peter Rawlinson said Lucid will soon begin delivering Air models to the Saudi market as part of an agreement with the government there to buy 50,000 vehicles over 10 years. Cars will also be sold to consumers there, he said.
The Public Investment Fund of Saudi Arabia is the majority shareholder of Lucid Group, of Newark, Calif., and recently purchased an additional $1.8 billion in shares as part of a $3 billion stock offering to boost Lucid’s cash position.
Lucid reported a second-quarter net loss of $764.2 million on Monday compared with a loss of $553.3 million in the same quarter last year. Revenue grew 55 percent to $150.9 million on deliveries of 1,404 vehicles.
“Looking into the second half of the year, we have many exciting events and announcements coming,” Rawlinson said during the company’s quarterly earnings conference call late Monday. “We’re on track to execute on deliveries under the purchase agreement with the government of Saudi Arabia, and thus far I’m pleased with consumer and government demand.”
In addition, Lucid expects to start limited production of the Air in Saudi Arabia in September by sending partially assembled vehicles from the U.S. to a new Saudi plant that will finish the production process, Rawlinson said.
So far this year, Lucid has produced 4,487 Airs and delivered 2,810. The build-up of vehicle inventory pushed Lucid to offer deep discounts starting on Saturday. The base price of the Air was cut by $5,000 to $84,050 with shipping.
The automaker reiterated its 2023 production goal of 10,000 vehicles, expressing optimism that price cuts, marketing efforts, Saudi sales and new Air trims will increase sales.
Lucid said it will launch a less expensive version of the base Air Pure trim — with rear-wheel drive rather than an all-wheel drive — and a high-performance Air Sapphire model. Lucid has said previously that the price of the Sapphire would come in at around $250,000, excluding shipping. Both models are expected to go on sale in the second half.
The automaker plans to formally present its second vehicle, the Gravity crossover, in November, Rawlinson said. The three-row crossover is expected to go on sale in late 2024. Lucid has not announced pricing.
Rawlinson said on the conference call that Lucid is raising public awareness of the brand through marketing efforts and by offering test drives across the U.S., but also needs to get more cars on the road for potential buyers to see them.
As such, Rawlinson said the automaker is willing to adjust prices to stimulate sales.
“We’re always willing to adjust to market conditions. I think that’s very important to retain that flexibility. The key is to get product out into the wild in customers’ hands. That’s the best marketing tool we’ve got,” Rawlinson said.
Lucid is facing a price war after market-leader Tesla slashed prices in January and increased sales incentives to clear out inventory. Tesla has maintained the price cuts. Other EV makers have followed Tesla’s lead by cutting prices or boosting lease deals and other incentives, such as offering below-market financing.
Lucid has also been struggling with rapid cash burn, prompting it to raise $3 billion through a stock offering, nearly two-thirds of which came from majority-owner Saudi Arabia’s Public Investment Fund.
The company’s cash balance at the end of the second quarter stood at $2.78 billion, compared with $900 million at the end of the year’s first three months.
Shares in Lucid rose about 3 percent in after-market trading Monday.
—Reuters contributed to this report
