By Cromwell Schubarth – TechFlash Editor, Silicon Valley Business Journal
May 5, 2022
After June 1, you’ll have to pay $10,000 to $15,000 more to buy one of Lucid Group Inc.’s electric cars.
The Newark, California-based rival of Tesla Inc. announced Thursday it’s raising prices on three of the lower priced versions of its Air vehicle by between 11% and 15%. The base price for those versions currently ranges from $77,400 to $139,000. After the end of this month, those model lines will have a starting price of between $87,400 and $154,000.
Lucid didn’t offer much of an explanation for the price hikes.
“The world has changed dramatically from the time we first announced Lucid Air pricing in September 2020,” was all CEO Peter Rawlinson said about them in the announcement.
The company will honor its current prices on the 30,000 vehicles that customers have already reserved, as well as for orders made by May 31, it said.
Lucid doesn’t seem to think the price hikes will have any effect on demand for the Air — which is being built at the company’s manufacturing plant in Casa Grande, south of Phoenix. In its announcement, the company reiterated its most recent forecast of producing 12,000 to 14,000 of the vehicles this year.
“Looking forward, we remain intently focused on ramping production and are excited about our product roadmap in 2022,” Rawlinson said in Thursday’s announcement.
To reach its targeted production range, the automaker will have to dramatically increase its output. To date, Lucid has only delivered 485 vehicles to customers, 360 of those in the first quarter. It’s already reduced its production forecast once, saying in March it wouldn’t be able to hit its original target of 20,000 for this year because of supply chain issues.
The company continues to face global supply chain and logistical challenges, including Covid-19-related shutdowns of its suppliers in China, that could impact production, Chief Financial Officer Sherry House warned in the company’s announcement
“We are working closely with our suppliers to mitigate the impact of disruptions,” House said.
It beat Wall Street’s forecasts
Lucid announced the price hikes as it released its first-quarter financial results. The automaker’s top and bottom lines for the period beat Wall Street’s expectations.
In the first quarter, Lucid lost 5 cents a share on $57.7 million in revenue. Analysts were expecting a loss of 31 cents a share on $55.6 million in revenue.
Lucid ended the first quarter with $5.4 billion in cash, “which is expected to fund the company well into 2023,” it said.
Investors seemed to shrug off the news of the price hikes and Lucid’s quarterly results, which it announced after the close of regular trading. In recent after-hours exchanges, the company’s stock price was up 7 cents a share, or less than 1%, to $18.92 a piece. Track the stock here.
On the same day that the Nasdaq composite index fell 5%, Lucid’s shares ended the regular session off nearly 7% to close at $18.85 a piece.
With the company’s stock price having lost more than half its value just since the start of the year, Lucid’s market capitalization has fallen to about $31 billion from more than $90 billion in November.
Most of the vehicles Lucid has produced to date were a limited edition top-of-the-line version of the Air that had a base price of $169,000. It’s stopped taking reservations for that model line.
Two weeks ago, the company added a high-performance version of the car that carries a starting price of $179,000. That price won’t change.
The number of reservations Lucid has recorded is up 5,000 from when it cut its production forecast. Those reservations represent about $2.9 billion in potential sales.
Last week, Lucid announced Saudi Arabia’s government will buy up to 100,000 of its vehicles over the next 10 years. The company’s top shareholder is a Saudi sovereign wealth fund.
Take a visual tour of Lucid’s production facility in Casa Grande in the photo gallery below: