Lucid Maintains Production Target, Secures Funding for Electric SUV Launch in Coming Year

The shares of luxury electric vehicle manufacturer Lucid rose by 4% in extended trading on Monday after it said it will stick to its annual production target and that it had the funds to begin producing its eagerly anticipated sport utility vehicles in 2019.

Although the company’s second-quarter earnings and revenue fell short of market expectations, its strong liquidity following a $3 billion stock offering in June under the direction of its majority owner, Saudi Arabia’s Public Investment Fund, has given it a competitive edge over its cash-strapped rivals who are experiencing a parts shortage.

Although deliveries for the second quarter remained essentially constant from the first three months at 1,404 units, Lucid said that it was on schedule to create 10,000 vehicles this year.

The EV manufacturer on Saturday reduced costs for its Air luxury car as part of a special offer in an effort to increase demand; the Air Pure variant is now available for $82,400.

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Cost-Cutting Measures

Growing borrowing costs and competition from Tesla’s Model S, which directly competes with Air and whose prices were dramatically reduced last year to $88,490, have threatened Lucid’s expansion.

Although personnel and logistical expenses have decreased, she said there was still “much room” for cost-cutting.

Despite the fact that Lucid has a large amount of stock, House and Rawlinson did not specify how long the offer would be valid or whether Lucid would maintain the lower rates if demand increased.

According to seven analysts surveyed by Refinitiv, Lucid reported sales for the months of April through June of $150.9 million, falling short of projections of $175 million. The adjusted loss was higher than the projected loss of 33 cents per share at 42 cents per share.

At the end of June, there was $2.78 billion in cash, up from $900 million three months earlier.

In November, Lucid plans to reveal its Gravity SUV ahead of its 2024 launch.

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Souce: Reuters