Lucid Group Reports its Q1 Earnings and Deliveries, the Company is Also Hiking Prices on June 1
Luxury electric car maker Lucid Group, Inc. announced financial results for its first quarter ended March 31, 2022. The results suggest that Lucid is facing an uphill battle to reach its delivery goals in 2022 as the company deals with supply chain issues and the rising costs of raw materials.
Lucid reported Q1 revenue of $57.7 million on deliveries of just 360 vehicles to customers in the first quarter.
However, Lucid Group reported strong customer demand for its first vehicle, the ultra-luxury Lucid Air sedan, with reservations now exceeding 30,000 vehicles representing potential sales of $2.9 billion. But the actual delivery lookout is much lower for the rest of the year. Lucid's 2022 production volume outlook is 12,000 to 14,000 vehicles.
The company ended the quarter with close to $5.4 billion cash on hand, which is expected to fund the EV startup well into 2023.
"We continue to have a healthy balance sheet, closing the quarter with nearly $5.4 billion of cash on hand, which we believe is sufficient to fund the Company well into 2023," said Sherry House, Lucid's CFO. "In addition to the 30,000 customer reservations we announced today, we recently signed a deal in which the government of Saudi Arabia committed to purchase up to 100,000 electric vehicles from Lucid over the next 10 years."
Lucid announced the agreement with the Government of Saudi Arabia last month for the purchase of up to 100,000 vehicles over a ten-year period. The Saudi Government's initial commitment is to purchase 50,000 vehicles from Lucid, with an option to purchase an additional 50,000 vehicles over the same period.
The order quantity is expected to range from 1,000 to 2,000 vehicles annually and increase to between 4,000 and 7,000 vehicles annually starting in 2025. Delivery of the vehicles is required to begin no later than the second quarter of 2023.
The vehicles purchased by the Saudi Arabian Government will include the Lucid Air sedan and other future models built and assembled at Lucid's existing Arizona factory and its future manufacturing facility that will be built in Saudi Arabia.
Lucid says its one of the largest commitments of its kind for zero emissions vehicles.
Lucid is Raising Prices of the Air Sedan
Lucid also announced on Thursday that it's raising prices, which could impact demand going forward. The price increases take effect on June 1, 2022. Lucid said it will honor current pricing for existing reservations as well as any new reservations made by May 31, 2022.
By honoring the original prices quoted to reservation holders, Lucid is hoping to avoid the backlash its rival Rivian faced in early March when it unexpectedly hiked prices by 20% for future and existing reservation holders for the Rivian R1T pickup and R1S SUV. The move angered many Rivian reservation holders and the company was under immense pressure to reverse its decision and honor the original prices quoted to customers, which it eventually did days later.
"The world has changed dramatically from the time we first announced Lucid Air pricing in September 2020," said Peter Rawlinson, Lucid's CEO and CTO. "But I want to reassure our existing reservation holders that we will be honoring current pricing for them as well as for any new reservations made before the end of the month."
As of June 1, the Air Grand Touring will be priced at $154,000 in the U.S., which is an increase of $15,000. The price of Air Touring will jump from $95,000 to $107,400 and the entry-level Lucid Air Pure will start at $87,400, up from $77,400. The Air Pure will be available in Q4 2022.
These higher prices put the Lucid Air out of reach of most car buyers, and all but ensures that the Air will never be a high-volume EV.
Lucid is following the Tesla playbook of selling its more-profitable and expensive models first, then using the profits to build more affordable models in the future. Lucid launched the low volume Lucid Air Dream Edition first, which quickly sold out. It costs $179,000. Lucid is only building 520 Dream Edition sedans, a figure derived from the Air's up to 520 miles of EPA-estimated range.
The price for the new Lucid Air Grand Touring Performance model announced two weeks ago, will remain priced in the U.S. at $179,000.
The new Air Grand Touring Performance is the most powerful electric vehicle on sale today, but will only be available in North America. Customer deliveries in the U.S. are slated to begin in June 2022 and by August 2022 in Canada.
The dual-motor Lucid Air Grand Touring Performance delivers 1,050 horsepower with an EPA-estimated driving range of 446 miles. The dual-motors on the front and rear axles can propel the sedan from 0 to 60 miles per hour in just 2.6 seconds.
Customers however can take advantage of a potential $7,500 U.S. federal tax credit on the purchase of a Lucid Air. Adjusted pricing for Canada will be published on Lucid's Canadian website on June 1, 2022.
Lucid is also facing growing competition from automakers such as BMW and Mercedes-Benz.
BMW recently unveiled the electric i7, the battery-powered version of its flagship sedan. Preorders for the i7 are now open. It starts at $119,000 and customers can reserve one online with a $1,500 deposit.
Mercedes-Benz unveiled its highly-anticipated, electric EQS sport utility vehicle in April. The sleek battery powered SUV will be built in the U.S. at the automaker's assembly plant in Tuscaloosa, Alabama and will go on sale in the fall.
The sleek EQS is the third fully-electric vehicle under the EQ sub brand of Mercedes-Benz following the launch of the fully-electric EQS sedan and EQE sedan. The EQS SUV is built on the same platform as the EQS and EQE.
The EQS SUV will also be launched in Europe by the end of the year. The EQS SUV and EQS sedan are poised to compete with premium electric models like the Lucid Air, Tesla Model S and Porsche Taycan.
Despite delivering just 360 vehicles in the first quarter of 2022, Rawlinson remains optimistic that the Air and future vehicles will continue to attract luxury EV buyers. Rawlinson previously served as chief engineer of the Tesla Model S, and set out to build a better car when he joined Lucid.
"We believe Lucid Air's unique fusion of a dynamic driving experience, interior space and comfort, range, fast charging, and performance is simply unparalleled, "said Rawlinson. "Looking forward, we remain intently focused on ramping production and are excited about our product roadmap in 2022 and beyond with Air Grand Touring Performance deliveries expected in June; Air Touring and Air Pure later this year; and with our Project Gravity SUV remaining on target to begin production in the first half of 2024."
Like most global automakers, Lucid has been dealing with global supply chain and logistics challenges since last year, including Covid-related factory shutdowns in China. CFO House said Lucid is working closely with its suppliers to mitigate the impact of the disruptions.
"While any extended disruptions could result in an impact to our production forecast, today we are reiterating our 12,000-14,000 vehicle production forecast for 2022 based on the information we have at this point combined with our mitigation plans," said House.
The Lucid Air was named the 2022 MotorTrend Car of the Year. The Air Grand Touring model features an official EPA estimated 516 miles of range and 1,050 horsepower.
The Air is being produced at Lucid's factory in Casa Grande, Arizona and customer deliveries are currently underway.
Lucid's stock price fell nearly 7% on Thursday to $18.85 on the announcement of its Q1 results. The stock is down nearly 54% since the start of the new year, which erased over $30 billion in market cap.
The company's shares trade on the NASDAQ under the stock symbol "LCID".
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