Feb 22 (Reuters) – (corrected this Feb 22 story to change the period to Q3 from Q2 in paragraph 8)
Lucid Group Inc (LCID.O) on Wednesday projected 2023 production well below analysts’ expectations and reported a significant drop in orders during the fourth quarter amid weaker demand, sending shares of the electric car maker down 11% after hours.
The Newark, California-based company, which was already grappling with supply chain and logistics issues and struggling to deliver cars, has been hit hard by aggressive price cuts sparked by Tesla Inc (TSLA.O) that have lured consumers away from its luxury cars amid High interest rates. and rising inflation.
“There’s a lot more competition than there was a year ago… a lot of electric cars are now available at lower prices than the Lucid Air,” said Garrett Nelson, an analyst with CFRA Research. “There is probably a lot of frustration from customers having to wait so long to get the cars they ordered.”
Lucid said it expects to produce 10,000 to 14,000 luxury electric vehicles this year. Analysts on average expected the company to produce 21,815 vehicles, according to Visible Alpha.
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The company, which is backed by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, delivered 4,369 cars last year, far fewer than the 7,180 units the company produced.
“We’ve cleared the major bottlenecks limiting manufacturing, but this has had some impact on the demand we’ve built early on, and that’s been exacerbated by the challenging macro environment,” Lucid CEO Peter Rawlinson said on a call with analysts. The company reported fourth-quarter revenue that missed expectations.
Price cuts by Tesla and Ford Motor Co (FN) have made it difficult for rivals like Rivian Automotive Inc (RIVN.O) and Lucid to grab share in an industry vying to shrink consumer wallets.
Lucid said it had received more than 28,000 orders as of February 21, down 6,000 reservations from the third quarter, after it delivered about 1,900 vehicles and saw cancellations. That was despite Lucid offering a $7,500 rebate on February 9th to purchase a few variants of the sedan before March 31st.
Chief Financial Officer Sherry House said Lucid will not release quarterly booking numbers going forward.
This year, the company will focus on improving production and delivery, and will take an “aggressive and comprehensive” look at reducing operating and manufacturing costs.
House said Lucid will incur capital expenditures of between $1.5 billion and $1.75 billion in 2023. That’s a 40% jump from 2022, but well below analysts’ expectations of $2.24 billion.
Lucid reported a cash balance of $1.74 billion in the fourth quarter, after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves.
Revenue rose to $257.7 million in the quarter ended Dec. 31, from $26.4 million a year earlier. Analysts on average expected $302.6 million in sales, according to IBES data from Refinitiv.
The company’s net loss narrowed to $472.6 million, or 28 cents per share, from a loss of $1.05 billion, or 64 cents per share, in the previous year.
Lucid shares were down 10.6% in extended trading. The stock fell 82% last year after Lucid cut its production forecast in half due to supply chain issues.
Additional reporting by Akash Sriram in Bengaluru and Abhiroop Roy in San Francisco; Editing by Shingeni Ganguly, David Gregorio, Lincoln Feist and Leslie Adler
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