Electric vehicle maker Lucid is not in the fast lane to profitability based on a new report.
Lucid, which targets the luxury end of the EV market, reported it brought in $150.9 million after selling 1,404 vehicles in quarter 2 and expects to hit its production goal of at least 10,000 vehicles this year, the company announced in a news release posted on its website.
Far down in a copy of the presentation used for its earnings call, there were some other numbers. Some looked good — such as the $150.9 million in revenue.
Then came the cost of making that money, which was listed at $555.8 million. Another $431.2 million was spent on research and development and other costs, while the only other revenue was $71.9 million from other sources.
Competition and rising borrowing costs are threatening Lucid’s growth. Its Q2 net loss widened to $764.2 million as the EV price war started by Tesla rages on, with Lucid slashing prices for its Air sedan at the weekend.@LucidMotors #Loss #EVPriceWar #EVhttps://t.co/ejXDCSJQIq
— Hive PR MENA (@hiveprme) August 8, 2023
Put it all together, and it spelled a $764.2 million loss for the quarter.
What that means is that for every car sold, the company averages losing $544,301.
However, the company’s release was upbeat.
“We’re on track toward achieving our 2023 production target of more than 10,000 vehicles, but we recognize we still have work to do to grow our customer base. During our second quarter, we achieved several major milestones, including signing agreements to enter into a long-term strategic partnership with Aston Martin,” said Peter Rawlinson, Lucid’s CEO and Chief Technology Officer.
“We look forward to exciting new products in the second half of this year, including the planned start of production of the Lucid Air Sapphire and the Lucid Air Pure Rear Wheel Drive, plus the highly anticipated unveiling of our new SUV, Lucid Gravity, forthcoming in November.”
The release said the company now has $6.25 billion it will use to keep it going until 2025.
Despite the deficit, the company’s stock rose Tuesday, according to Barron’s.
“The tone of the call was notably more positive than we have heard recently,” Chris McNally, an analyst with Evercore, said on Tuesday, according to Insider. “With yesterday’s news of price cuts, investors will now question how much volume can grow on price reductions.”
Insider noted that the EV market, which has been flooded with new options and startups this year, is not an easy place to do business.
Speed is in its essence. Explore the final technical specifications for the #LucidAir Sapphire.
Power: 1,234 hp
Acceleration: 1.89s 0-60mph
Top speed: 205 mph
Full tech specs: https://t.co/IbRGWJrkw2 pic.twitter.com/fTNC1olJvR— Lucid Motors (@LucidMotors) August 8, 2023
“Profit losses on electric vehicle sales are nothing new. It’s a concept that legacy car companies like Ford and GM are also grappling with as they try to transition their fleets away from gas-guzzling vehicles,” it wrote.
Insider noted that making a profit has become even harder as companies try to match Tesla, which has recently slashed prices.
Ford has already indicated it could lose $3 billion this year on its EV business.
This article appeared originally on The Western Journal.
