As the EV industry is crushed beyond what anyone could have believed a year ago, it is easier to see which companies can survive that trouble and which do not. Lucid Group (NASDAQ: LCID) is on the “no chance” list. It produced only 2,110 vehicles and delivered only 2,394 in the second quarter, which is so small as to be unimaginable.
Lucid will announce second-quarter earnings on August 5. With production and delivery numbers so low, the top line can only be pathetic. Revenue in the first quarter was only $173 million, up from $149 million in the same quarter the year before. The company lost $684 million, an improvement from $780 million. The loss for 2024 could be as high as $3 billion.
Lucid has painted a recent infusion of capital as a bright spot. It disclosed Ayar Third Investment Company (“Ayar”), an affiliate of the Public Investment Fund (“PIF”), to purchase $1.0 billion of newly created series of convertible preferred stock via private placement, subject to customary closing conditions. Late last year, Bloomberg reported on earlier Saudi investments in an article titled “Saudis Find a Bottomless Money Pit in Lucid.” The analysis could not have been more pessimistic about the tiny EV company.
Over the last two years, Lucid’s stock has been down 84%, while the S&P 500 has been up 43%. Its market cap is still $7.3 billion, indicating that investors believe the Saudis may continue to support the company.
Lucid has made the mistake of offering expensive EVs. The price of its Lucid Air is between $70,000 and $90,000. Among the reasons Americans do not buy EVs is that they are considered too expensive. Add this to anxiety about the EV’s range and the low number of charging stations.
Lucid is up against every major car company, including Tesla (NASDAQ: TSLA). With just over 2,000 deliveries a quarter, it cannot make it.
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