Lucid Motors (NASDAQ:LCID) stock is in the spotlight after the National Highway Traffic Safety Administration (NHTSA) announced that it had opened a recall query (RQ) to review the sufficiency and safety of Lucid’s recall solution for a recent safety recall.
Lucid’s last safety recall for its 2022 and 2023 Air was announced in January. The recall stemmed from a high-voltage coolant heater error that could result in a failure to defrost the windshield, leading to the possibility of driver visibility reduction and increasing the chances for a crash. A total of 2,042 vehicles were potentially affected. This is the only recall under review by the NHTSA at the time.
“NHTSA’s Recall Query understates the remedy being offered. Lucid’s approach introduces a new diagnostic software feature to conduct active remote monitoring for faults — even when the hardware at issue is not in use,” Lucid Motors said in an official statement. “We use this capability in addition to electronically notifying customers when there is an actual lack of defrost capability. Lucid intends to demonstrate that the analysis underlying this approach is sound and that customer safety is assured.”
LCID Stock: NHTSA Announces Recall Query Into Coolant Heater Error
To resolve the error, Lucid pushed out an over-the-air (OTA) update that could identify high-voltage coolant errors and provide drivers with a warning. In the event of a heater failure, Lucid will repair the component at no cost. Owners of the recalled vehicles should expect to receive a notification letter by March 8.
According to Cars.com, the 2022 Air has received a total of nine recalls, while the 2023 Air has received six recalls. Most of the remedies for these recalls were addressed by OTA updates.
LCID stockholders don’t seem to be placing too much weight on the RQ announcement, as LCID stock is up more than 3% today. Since the beginning of the year, shares have fallen by about 10%.
During the fourth quarter, the electric vehicle (EV) company delivered a total of 1,734 vehicles while producing 2,391 vehicles. That brought 2023 full-year deliveries and production to 6,001 and 8,428 vehicles, respectively. In August, the company had reaffirmed its 2023 guidance for “more than 10,000 vehicles.” However, that guidance was dropped to between 8,000 and 8,500 vehicles in November.
Now, all eyes are on the company to report its fourth-quarter earnings on Wednesday, Feb. 21, after the market close. A major focal point will be the disclosure of guidance for 2024. For the quarter, analysts expect $180 million of revenue — signaling a year-over-year (YOY) decline of 30.22% — and a GAAP EPS loss of 29 cents.
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.
