Shares of American EV maker Lucid Motors (LCID) are falling Wednesday after reporting a drop in Q2 production. The decline is unexpected, especially considering many EV makers seeing growth in the second quarter.
Lucid shares are down after Q2 production decline
Despite several EV makers reporting record numbers in the second quarter, Lucid’s numbers continue to fall.
Lucid produced 2,173 electric vehicles at its manufacturing facility in Arizona in Q2, delivering 1,404 between April 1 and June 30, 2023.
Coming off its strongest production quarter in Q4 2022, the EV maker’s production numbers have now declined for the past two quarters.
After building 3,493 Lucid Air models in the fourth quarter, Lucid’s production slipped 33% to 2,314 units in Q1 2023 and now another 6% in Q2 to 2,173.
Lucid said after its Q4 earnings it was aiming to build between 10K and 14K models this year, falling significantly short of Wall St expectations upwards of 20K. With 4,487 EVs produced so far this year, Lucid will need to pick up the pace to hit its goals.
Deliveries have not held up much better. Lucid delivered 1,932 EVs in the fourth quarter, 1,406 in the first quarter of 2023, and 1,404 in Q2.
The company announced it has begun “material shipments to the Kingdom of Saudi Arabia.” Last month, the EV maker revealed it was raising around $3 billion through a public stock sale and a new investment from its majority shareholder, Saudi Arabia’s Public Investment Fund (PIF).
Lucid announced a long-term plan last February to bring EV manufacturing to the region with a new international facility aiming for 150,000 vehicle production annually.
More recently, Lucid may have found a new source of revenue to drive profits. The EV maker entered into a strategic tech partnership last month with Aston Martin to supply its proprietary EV tech.
The British sports car maker plans to use Lucid’s advanced tech to build a new EV platform to power “the world’s most thrilling and highly desirable electric performance cars.”
Lucid says the deal will help expand the reach of its products while “paving the way for more mainstream applications” in the future. Lucid’s CEO, Peter Rawlinson, even hinted at licensing its tech to a company to build an affordable (roughly $25K) EV.
Shares of Lucid are down over 10% following the Q2 production drop. EV stocks have been trending upwards the past few weeks, with EV makers like Tesla and Rivian crushing estimates and driving the sector higher. Even Mercedes-Benz’s electric vehicle deliveries surged over 600% in the US, driven mainly by its higher-end models.
Does Lucid have a demand problem? The EV maker has been struggling to ramp production and deliveries all year with ongoing supply chain issues.
With competition from Tesla, Mercedes-Benz, and more, Lucid is struggling to find its place in the US market. Meanwhile, other EV makers, like Rivian, are turning the corner with a “healthy” supply chain and “robust backlog of preorders.”
We’ll learn more about the situation when Lucid drops its Q2 financial results on Monday, August 7, 2023.
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