Lucid's Investors Are Getting Tired of Waiting for a Turnaround

Lucid reported 1,932 deliveries and a net loss of $473 million for the October-December period. Zacks Equity Research said on May 1 it expects Lucid to post a higher net loss for the first quarter of this year.

In the wind-up to Monday’s earnings call, investors submitted questions for consideration. Among them: What’s the plan for the demand shortage? When will more affordable models be made? And if there’s a recession, does Lucid have enough cash to survive it?

The most popular question, with more than 14,000 votes, took issue with Lucid’s projections back in 2021, prior to listing shares on the stock market. Lucid said at the time that it expected to achieve about 49,000 deliveries in 2023 across two models, the Air and Gravity. Lucid launched the Air in late 2021.

“Peter, you have said ‘I like to under-promise and like to over-deliver,’” the question began. “When will we see under-promising and over-delivering? It has been the complete opposite so far.”

The online used-vehicle retailer reported a net loss of $286 million for the quarter ended March 31, smaller than the $506 million it lost in the first quarter of 2022. Revenue fell 25 percent to $2.6 billion. It also reported an adjusted loss of earnings before interest, taxes, depreciation and amortization of $24 million,significantly smaller than its adjusted EBITDA loss of $348 million a year earlier.

“Given our strong start to the year, we expect to achieve positive adjusted EBITDA in Q2 2023,” CEO Ernie Garcia said in a statement.

Carvana sold 79,240 used vehicles, down 25 percent from 105,185 in the year-earlier period. That sales figure was slightly higher than a preliminary estimate the company gave in a March 22 regulatory filing.

The company attributed the first-quarter sales decline to a “strong pace” of inventory reductions from the fourth quarter of 2022. It also said it cut its advertising spend by 64 percent year over year, which impacted retail vehicles sold. In a letter to shareholders, Carvana said the trimmed advertising spend drove the company to its lowest customer acquisition cost per vehicle in its history.

Higher interest rates and wider credit spreads, plus prioritization of profitability initiatives, also drove down sales volume in the quarter, the company said.

Carvana reported total gross profit per vehicle of $4,303, which it said was a first-quarter company best.

Lyft Inc shares tumbled 17% in premarket trading on Friday as the ride-hailing company’s strategy to claw back market share from rival Uber with lower fares stoked concerns about a hit to its profit margins.

At least nine analysts slashed their price targets on a stock that has widely underperformed the market this year.

The company’s market capitalization was set to decline by nearly $700 million to about $3.3 billion, a far cry from the over $24 billion valuation it commanded in its 2019 stock market listing. Uber has a valuation of more than $75 billion.

Lyft gave a disappointing adjusted core earnings forecast for the second quarter on Thursday as efforts to add more riders with price cuts take a toll on profitability, underscoring the hurdles new CEO David Risher’s faces in turning around Lyft.

“Given how dynamic pricing is, Lyft’s report highlights how little it controls the destiny of its own profit and loss statement in the event Uber wanted to cause more damage,” said RBC Capital Markets analyst said Brad Erickson.

Uber CEO Dara Khosrowshahi this week indicated the company would not start a price war with Lyft, saying that “the days of paying for share and essentially using shareholder money to buy share temporarily .. are over.”

All variants of the Model S sedan and Model X sport utility vehicle were raised 19,000 yuan ($2,750), according to the automaker’s website. Those vehicles now start at 808,900 yuan and 898,900 yuan, respectively.

The move, together with $250 bumps in its more popular models and price hikes for the S and the X in the US last month, mark a partial reversal from several rounds of aggressive cuts earlier in the year, which saw the company post its lowest automotive gross profit margin in almost three years in the first quarter.

However, tweaking the prices of its higher-end vehicles is less meaningful to Tesla’s bottom line than adjusting the cost of the Model 3 or Y, with Musk having said the two premium models are “of minor importance” to Tesla’s future.

LEVC said the platform, dubbed Space Oriented Architecture (SOA), had been jointly developed over the last two-and-a-half years in China, Sweden, the United Kingdom and Germany, would provide EVs with longer range, fast-charging capabilities and advanced driver-assistance features.

Speaking to reporters on Thursday at LEVC headquarters in Ansty, England, executives said the flexible platform could be used for a wide range of EVs, including pickup trucks, large SUVs or even mobile homes.

But executives said they could not provide details of which EVs LEVC would focus on first, when the new EVs might roll off the production line or where they will be made.

Earlier this year, LEVC said Geely was planning a big investment to turn the maker of London’s famous black taxis into a high-volume, all-electric brand with a range of commercial and passenger vehicles.

The company said it could not yet provide an update on those plans.