Manufacturing

Lucid price cuts result in record EV sales

April 10, 2024, 10:42 AM

Lucid Group CEO Peter Rawlinson at the Los Angeles Auto Show. The company announced a 40% year-on-year sales increase

Prices reduced by up to 10%
Share price up after deliveries
25% production fall from 2023

The Saudi-backed US electric vehicle (EV) maker Lucid set a new quarterly sales record for its luxury models in the first quarter of 2024.

Shares in Lucid, which has funding from the kingdom’s Public Investment Fund (PIF), rose by 3 percent on Tuesday after it announced the delivery of almost 2,000 Lucid Air models.

The company’s shares are 40 percent higher compared to the same period last year.

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Lucid’s sales success came after price reductions of up to 10 percent on its inventory cars in February, a move aimed at boosting demand in a challenging period for the EV market.

High interest rates have softened consumer interest in EV purchases, leading buyers to opt for more affordable hybrid alternatives instead.

Concerns over EV demand intensified after Tesla reported a drop in quarterly deliveries for the first time in almost four years earlier this month.

Lucid’s production fell 25 percent year on year, with a little over 1,700 vehicles manufactured in the quarter ending March 31.

In February Lucid announced plans to launch a mid-size car by late 2026, to appeal to a wider range of customers.

This would position it in a fiercely competitive market that includes Tesla’s Model Y.

Lucid’s Gravity SUV is also due to be released later this year.

Tesla, meanwhile, has scrapped plans for its cheaper entry-level car, Reuters reported last week.

Last month Lucid announced a $1 billion capital investment from Ayar Third Investment Co, a company linked to PIF.

This influx of funds should put Lucid in a better position compared to other financially constrained EV startups facing the high costs of scaling up production.

Lucid disclosed the investment weeks after its CEO, Peter Rawlinson, told the Financial Times he was cautious against becoming overly dependent on Saudi Arabia for continuous financial support.

“If I adopt a mindset that there is bottomless wealth from PIF, that is very dangerous. That is something I will never do, I respect them far too much for that,” Rawlinson said.

Lucid reported a $2.8 billion loss in 2023 and finished the year with approximately $1.4 billion in liquidity.