Lucid Reports Q1 Earnings: Stock Drops 10% - Trade Oracle

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Lucid Reports Q1 Earnings: Stock Drops 10%

Lucid Motors reported its first-quarter earnings, and the results were not exactly what investors were hoping for. As a result, the company’s stock opened lower by about 10%. During Q1, Lucid manufactured 2,314 vehicles and delivered 1,406 of them. The delivered vehicles contributed to a revenue of $149.4 million, which was up by approximately 159% year-over-year. However, analysts polled by Refinitiv were expecting $209.9 million. Meanwhile, net loss tallied at $779.52 million, equivalent to an EPS loss of 43 cents. That means that for every vehicle Lucid delivered during Q1, the company lost about $554,000.

Guidance and Reservations

Full-year guidance was also a disappointing metric. During Q4, Lucid guided for 2023 production of between 10,000 and 14,000 vehicles, while analysts were expecting between 20,000 and 22,000 vehicles. Now, the guidance has been changed to “more than 10,000 vehicles.” In 2022, Lucid produced a total of 7,180 vehicles and delivered 4,369 of them. As of February 21, Lucid had 28,000 reservations, which was down from “over 34,000 reservations” as of November 7. Lucid did not provide an updated reservations figure in its recent earnings.

CEO Peter Rawlinson’s Comments

CEO Peter Rawlinson hopes that the release of the Gravity SUV will help turn things around for the company. Rawlinson believes that the continuing advancements of Lucid’s in-house technology position the Gravity SUV to redefine the luxury SUV category. The Gravity SUV will be unveiled later this year ahead of its launch in 2024. Rawlinson added, “game-changing range, driving experience, charging speed, voluminous interior space, and an unrivaled combination of luxury and performance.”

Liquidity and Demand

On the bright side, Chief Financial Officer Sherry House noted that the company ended the quarter with just over $3.4 billion in cash, cash equivalents, and investments, while total liquidity was about $4.1 billion. House believes that Lucid’s liquidity position will be able to sustain business operations until at least Q2 2024. With production below estimates and a lack of clarity on reservations, investors could rationalize that demand is taking a hit. Lucid stated that seasonality is a factor, attributing its Q1 numbers to a slow January and changes in federal EV tax credits. Price cuts at Tesla may have also stolen market share from the emerging EV company.

Conclusion

Lucid’s Q1 earnings report was not what investors were hoping for, with the company missing revenue estimates and experiencing a net loss of $779.52 million. However, CEO Peter Rawlinson is optimistic that the upcoming release of the Gravity SUV will turn things around for the company. With a strong liquidity position, Lucid should be able to sustain business operations until at least Q2 2024. However, with production below estimates and a lack of clarity on reservations, investors may be concerned about demand for the company’s vehicles.

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