LCID Stock Alert: Lucid Motors Issues 2 New Recalls

  • Luxury EV maker Lucid (LCID) announced two new recalls today, and LCID stock is retreating about 3% in response. 
  • One recall involves a software problem, while another was sparked by an issue with the defrosters of a number of its EVs. 
  • Lucid delivered nearly 2,400 EVs last quarter, setting a new record.
LCID stock - LCID Stock Alert: Lucid Motors Issues 2 New Recalls

Lucid Motors (NASDAQ:LCID) stock is down about 3% today and trending after the electric vehicle (EV) maker issued two new recalls. Specifically, the automaker is recalling about 5,250 of its Air sedans due to a software issue and another 7,500 Airs because of potential problems with their defrosters.

The news came after the company announced that its deliveries had risen sharply last quarter, setting a record in the process. The report sparked a rally of nearly 8% by LCID stock.

A Software Error and a Defective Coolant Heater

The software error that triggered the recall of about 5,250 of Lucid’s EVs may result in the affected automobiles losing power. The defroster issues that caused roughly 7,500 of Lucid’s Air luxury sedans to be recalled may prevent their windshields from being fully defrosted.

Lucid released an over-the-air (OTA) update to resolve the former software issue and warned drivers about the latter defroster issue. According to the recall notice:

“High voltage coolant heaters that fail will be replaced. Software updates and repairs will be performed free of charge. Owner notification letters are expected to be mailed August 9, 2024.”

Lucid’s Q2 Delivery and Production Numbers

Lucid delivered a record 2,394 of its EVs last quarter, representing a 22% increase versus its first-quarter total of 1,967. In Q1 of 2023, the automaker delivered just 1,406 EVs.

The company’s decision to tremendously slash its prices in recent years has undoubtedly sparked increased demand for its vehicles. In 2021, its Lucid Air EVs sold for nearly $100,000 each, while they can be obtained for as little as $70,000 today.

On the production side, Lucid’s total jumped to 2,110 in Q2 from 1,727 in Q1.

The Medium-Term Outlook of LCID Stock

The automaker will have to produce 5,163 EVs in the second half of the year to meet its 2024 production guidance of 9,000.

Meanwhile, the automaker plans to start producing its Gravity SUV in the second half of 2024. As I pointed out in a previous column, the Gravity, which can seat up to seven people, has received generally very upbeat reviews from automotive-oriented publications.

Moreover, Lucid CEO Peter Rawlinson reported that the EV’s total addressable market (TAM) “will be six times as large as its sedans that are currently on the market.”

On the date of publication, Larry Ramer 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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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