Saudi-backed Lucid cuts 2022 EV output by half amid logistics woes

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• Production guidance revised on supply chain and logistics challenges 
• EV manufacturer expects to produce 6,000 to 7,000 vehicles this year
• Lucid has a cash stack of $4.6bn to glide through 2023

US-based Lucid Group on Wednesday reduced its production outlook for electric vehicles (EVs) in 2022, citing supply chain and logistics challenges.

In a statement, the company, which is 60 percent owned by the Saudi sovereign wealth fund, Public Investment Fund, expects to produce between 6,000 and 7,000 luxury electric vehicles this year, down from 12,000 to 14,000 units it targeted in February.

“We have identified the primary bottlenecks, and we are taking appropriate measures, bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organisation,” said Lucid chief executive officer Peter Rawlinson.

He remained confident in overcoming these near-term challenges, stating Lucid Air reservations have touched over 37,000, representing potential sales of about $3.5 billion.

The EV manufacturer had raised prices for most models in May amid rising commodity costs.

Lucid reported Q2 2022 revenue of $97.3 million on deliveries of 679 vehicles.

“We continue to have a strong balance sheet, closing the quarter with $4.6 billion cash, cash equivalents and investments, which we believe is sufficient to fund the company well into 2023,” said Lucid chief financial officer Sherry House.

In May, Saudi Arabia’s Minister of Investment Khalid Al-Falih said Lucid is planning to build at least three manufacturing plants in the kingdom.

The company has already revealed plans to build an EV production hub in Saudi Arabia, which will have an annual capacity of 155,000 vehicles and help create 4,500 new jobs.