Despite a lower-than-expected inflation report, shares of Lucid (NASDAQ:LCID) are plunging lower after the electric vehicle (EV) company provided an update for the second quarter.
Lucid produced 2,173 vehicles and delivered 1,404 of them during the three months ended June 30. Wall Street analysts reporting to FactSet were expecting about 2,000 deliveries, which means that Lucid missed by a staggering 30%.
During the first quarter, the company produced 2,314 vehicles and delivered 1,406 of them. That means that production declined by about 6% quarter-over-quarter (QOQ), while deliveries basically remained the same. That doesn’t reflect well for LCID stock. A silver lining is that Lucid delivered 679 vehicles in the year-over-year (YOY) quarter, representing growth of 106%. On top of that, Lucid disclosed that it had began “material shipments” to Saudi Arabia.
LCID Stock: Lucid Reports Q2 Production and Deliveries
It appears that ramping up production and supply chain inefficiencies remain as challenges for the emerging EV company. Earlier in February, Lucid guided for 2023 production of between 10,000 and 14,000 vehicles. It’s only produced 4,487 vehicles as of June 30, which means that production must ramp up in order to meet the lower end of guidance. At the same time, demand doesn’t seem to be an issue, as Lucid had “more than 28,000 reservations” as of Q4 of 2022.
Price cuts by competitor Tesla (NASDAQ:TSLA) are also a risk. Tesla has aggressively cut prices on its lineup of vehicles this year, many of which compete directly with Lucid’s Air model. CEO Peter Rawlinson has a plan for that, although it may take quite some time: “After Gravity we’re going to do [Tesla] Model 3 and Model Y competitors. We think around $50,000, maybe $48,000 – something like that. It’s too early to say, but that’s the vision.”
Rawlinson stated that the Lucid Tesla competitor will come after the upcoming Gravity, which will liekly debut sometime next year.
Meanwhile, Lucid has confirmed that it will report its second-quarter earnings on Aug. 7 after the market close. Analysts are expecting revenue of $233 million, which would imply YOY growth of 139% and QOQ growth of 56%. It’s no shock that adjusted EPS is forecasted to be a loss of 39 cents, as Lucid is nowhere close to profitability.
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 InvestorPlace.com Publishing Guidelines.
