LCID Stock Plunges as Lucid Slashes EV Production Targets

  • Lucid (LCID) delivered 679 vehicles during the second quarter.
  • It now expects full-year production to be between 6,000 and 7,000 vehicles.
  • Shares of LCID stock are down more than 50% year-to-date.
LCID stock - LCID Stock Plunges as Lucid Slashes EV Production Targets

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Shares of Lucid (NASDAQ:LCID) stock are falling by more than 10% after the company reported Q2 earnings below expectations. The electric vehicle (EV) company reported that it had delivered 679 vehicles during the quarter, up from 360 deliveries during Q1. Meanwhile, revenue tallied in at $97.3 million, falling below the consensus estimate of $145.49 million. Making matters worse, the revenue figure was also below the low analyst estimate of $118.47 million.

The company issued full-year production guidance of between 6,000 and 7,000 vehicles. This was after it lowered its guidance during Q1 from 20,000 vehicles to between 12,000 and 14,000 vehicles. At the time, Lucid cited a shortage of components, like semiconductors, glass, and carpet, as the reason for reduced guidance. CEO Peter Rawlinson added:

“Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We’ve 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 organization.”

LCID Stock Sinks on Low Deliveries and Guidance

Lucid disclosed that it had 37,000 vehicle reservations, up from 30,000 during Q1. These reservations represent potential sales of about $3.5 billion. In addition, the reservations do not include an up to 100,000 vehicle order from Saudi Arabia that is set to be delivered over the next 10 years. Saudi’s Public Investment Fund (PIF) is a major shareholder in LCID and controls a 62% stake. The reservations also do not take into account reservations for the upcoming Gravity SUV.

Profitability still remains a problem for the young EV startup. It reported a loss of $555.3 million, which equates to an earnings per share loss of 33 cents. This was somewhat of a bright spot, as analysts were expecting a loss of 36 cents.

Furthermore, the company now has $4.6 billion of cash, cash equivalents and investments. CFO Sherry House believes that the cash balance will be able to fund Lucid “well into 2023.”

Lucid has hired former Stellantis (NYSE:STLA) executive Steven David as its new senior vice president of operations. David will overlook quality-control, logistics and manufacturing. In an interview with CNBC, Rawlinson admitted that the “immaturity of our logistics” was a major challenge for the company.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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