Lucid Motors reveals drop in revenues in the first quarter of 2023, as well as reduced production output, hinting at slowing demand for the Air sedan.
The EV maker posted a net loss of $779.5 million in the first three months of 2023, compared to $472.6 million in the previous quarter, but still has $3.4 billion in cash, buying it about a year's worth of operation.
Lucid is currently testing the Gravity SUV, expected to enter production in 2024 and become the EV maker's second distinct offering.
Lucid Motors already entered the spring of 2023 on a wave of cost and personnel cutting measures, as well as price reductions for the Air sedan. But yet another cut could materialize, with Lucid gently tempering expectations of its 2023 output totals.
The EV startup now faces growing worries about a slump in demand, the first telltale signs of which were voiced by industry observers late last year.
Lucid's financial results, revealed this week, certainly point to a gradual decline in fortunes: The company reported revenues of $149.4 million in the first quarter of 2023, in contrast to the $257.7 million in the fourth quarter of 2022, and $195.5 million in the third quarter. The EV maker's net loss widened to $779.5 million in the first three months of the year, compared to $472.6 million in the previous quarter.
Output figures were dented as well, with Lucid producing 2314 vehicles in the first three months of 2023, compared to 3493 in the fourth quarter of last year. In all, Lucid produced 7180 vehicles in 2022, delivering a much more modest 4369 vehicles overall during that time.
Lucid entered 2023 initially expecting to produce between 10,000 and 14,000 vehicles this year, but now indicates that it "plans to manufacture more than 10,000 vehicles in 2023."
The good news is that Lucid still has over $3 billion in cash after the first three months of 2023, giving it enough money to operate at least halfway through 2024. But getting the Gravity SUV ready for production in 2024 will require increased expenditures.
"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 CFO.
What's to blame for the increasingly apparent slowdown in luxury EV sales?
Growing fears of a recession were one of the most immediate suspects, at least at first, even though these fears are hardly new in the age of the pandemic-dented supply chains and the rising costs of raw materials. However, prospective buyers of a six-figure electric sedan are unlikely to be swayed by minute economic wobbles, so this culprit may not be all that likely.
Another theory is an overall slowdown in the EV market following a short-lived buying frenzy observed in Europe and the US in 2021 and the first half of 2022. The slump started becoming apparent in late fall of 2022 and prompted some unusually generous price cuts implemented by Tesla.
Yet another theory is the availability of too many luxury EV sedans at the moment, with Lucid having to fight off a growing number of German competitors.
If there is a lifeline for Lucid on the horizon, it's the planned start of Gravity SUV production, which promises to give prospective EV buyers, perhaps tired of six-figure electric sedans by now, another alternative.
"We will unveil our Gravity SUV later this year ahead of its launch in 2024, and we cannot wait for everyone to experience it," said Peter Rawlinson, Lucid CEO and CTO.
Is the luxury EV market slowing down due to too many EV sedans, worries of a recession, or some other cause? Let us know what you think.