Can Lucid Turn These Numbers Around?

• Lucid Motors reveals third quarter production numbers, with 1550 units of the Lucid Air produced and 1457 units delivered.

• The EV maker's quarterly production figures have declined throughout the year, with the company pointing to slowing demand.

• Lucid has recently launched the least expensive version of the Air in the form of the single-motor RWD model, and is getting ready to reveal the Gravity SUV, due to enter production in 2024.

EV sales had already begun to see a slowdown a year ago, prompting some significant price drops by a number of EV makers, as well as a price war in the first quarter of 2023.

Lucid responded by slashing prices as well, and just a couple of weeks ago introduced the most affordable Air sedan to date, with the single-motor RWD model starting at $78,900. The new model, completing the Air lineup, is priced $5000 below what had been the most affordable Air variant up until that point.

But demand is still slowing, it seems.

Lucid revealed its third quarter production numbers this week, painting a worrying picture for the EV startup just ahead of the reveal of the Gravity SUV next month.

The EV maker indicated that it produced just 1550 vehicles during the third quarter, delivering a total of 1457 vehicles, while an additional 700 were shipped to Saudi Arabia for final assembly.

These numbers represent a drop of almost 30% compared to the prior quarter—a factoid which was not ignored by stock traders this week.

By comparison, Lucid produced 2173 units of the Air sedan in the second quarter of this year, and 2314 in the first quarter. A year ago, Lucid saw 2282 Air sedans leave the factory in the third quarter.

This pace of production is a problem because Lucid had set a loose production target of over 10,000 vehicles for 2023. The EV maker has quite a bit of ground to make up in the remaining quarter of the year, at just under 4000 vehicles.

The good news is that Saudi Arabia has struck a deal to buy some 50,000 Lucid Air sedans for government use over a 10 year period, so longer-term demand appears assured. Another bit of good news is that Lucid has enough cash to fund itself through 2025.

Quite a bit of hope is now pinned on the Gravity SUV, given how much competition the Air sedan now faces.

Still, the Gravity SUV won't be arriving into an unoccupied segment, as it's set to face stiff competition from Team Germany.

Demand for EVs began to slow about a year ago, after a pandemic EV rush. In essence, just about everyone who ordered an EV in late 2020 and 2021 had received their cars—after many months of delays—sometime by 2022, as automakers worked through their backlogs.

By the end of 2022, EV makers had to find entirely new buyers.

Of course, another way to look at the theory of declining EV demand is that at the moment Lucid only fields an EV in one segment—full-size luxury electric sedans—a segment that has seen several new arrivals since Air production began in 2021. Even prior to 2023 there had been a feeling in the industry that this segment was effectively overserved, with several automakers fighting over a slice of a finite pie, while other segments received scant attention for various reasons.

Now, the era of deep-pocketed early adopters being the main drivers of EV sales appears to be coming to an end.

Will the luxury EV sedan segment see further retreats in the coming years, as EVs go mainstream, or will it remain an important category for automakers? Let us know what you think.