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Saudi-backed Lucid shares down as deliveries take hit  

Lucid EV Air Touring Lucid
The Saudi Arabia-backed startup has been struggling to ramp up production in the face of supply chain issues

Lucid Group said its second-quarter production dropped from the previous three months while deliveries stayed flat, sending the shares of the luxury electric-vehicle maker down about 12 percent on Wednesday.

The Saudi Arabia-backed startup has been struggling to ramp up production in the face of supply chain issues, while a price war started by market leader Tesla in January has intensified competition.

Lucid delivered 1,404 vehicles in the quarter to June 30, compared with 1,406 deliveries in the previous quarter. Its production fell six percent sequentially to 2,173 vehicles.

The company had trimmed its 2023 production forecast and reported a lower-than-expected first-quarter revenue in May as it took a hit from Tesla’s price war and rising interest rates.

“We continue to view Lucid as a broken growth story and its ramp up rate has been particularly disappointing considering its newer, state-of-the-art factory in Casa Grande, Arizona,” CFRA Research analyst Garrett Nelson said.

Lucid’s Air luxury sedans start at $87,400, putting them in direct competition with the Elon Musk-led automaker’s Model S that costs $88,490.

“We continue to believe significant price cuts are needed on the Air, particularly in light of increasing competition, in order to stimulate demand,” Nelson added.

Lucid has also been struggling with a cash crunch and had unveiled plans in May to raise about $3 billion through a stock offering, nearly two-thirds of which would come from its largest investor Saudi Arabia’s Public Investment Fund (PIF).

Last month, the EV maker signed a deal with Aston Martin, giving the British company access to its electric powertrain and battery technologies in return for a 3.7 percent stake.

Lucid said it would report financial results for the second quarter on August 7 after markets close.