Transportation

Lucid rolls back production goals even as demand for luxury EV rises

Comment

Lucid Motors steering wheel
Image Credits: Lucid Motors

Earnings season rolled along today with notes from Lucid Motors’ fourth-quarter results. The company, like other electric vehicle (EV) companies, is nascent in revenue terms, albeit further along than some. The company publicly debuted as a SPAC company in July last year after merging with Churchill Capital IV.

The company’s value has had a turbulent day. Lucid’s stock rose nearly 10% during regular trading, adding $2.63 to its per-share value. However, after the company reported its results, its shares fell, erasing 10.8% of its value, or around $3.14 per share.

In aggregate, Lucid is net down a fraction today as of the time of writing. Why? Revenue came in under expectations. But as with all companies like Lucid that have been busy building in anticipation of future sales, there’s more to the story.

To get a proper grip on Lucid’s Q4, and full-year 2021, results we’ll start with a look at its non-earnings results, including customer reservations and the like. Then, we’ll explore its financial results in detail.

Reservations and capacity

After announcing 17,000 reservations last November for the Lucid Air, the company’s luxury sedan that boasts a long range and the largest shudders “frunk” on the market, customer reservations topped 25,000 as of Monday, reflecting potential sales of more than $2.4 billion.

The first deliveries for the Lucid Air, which TechCrunch drove for the first time in September, began in November. Only 125 Airs were delivered in the fourth quarter, but to date, there have been a total of 300 — a sign that Lucid might be ramping up production and delivery.

The EV company noted that production currently exceeds 400 vehicles and that 2022 should see a range of 12,000 to 14,000 Lucid Air vehicles being produced, which is down from the 20,000 units Lucid had promised during its Q3 earnings. The company blames supply chain issues for the setback, and expects those issues to lessen in the second half of the year.

Lucid Air production will be powered by Lucid’s manufacturing facilities in Casa Grande, Arizona, where the company’s 2.85 million-square-foot expansion is on track, bringing production capacity from its current 34,000 Lucid Airs per year to 90,000 units, says the company.

Lucid is also building a new manufacturing facility in the Kingdom of Saudi Arabia that it expects to finish by 2025. The company estimates the Saudi plant could bring in up to $3.4 billion in revenue over the next 15 years. For its part, working with Lucid helps Saudi Arabia’s goal of transforming and diversifying its economy by developing sustainable energy and transportation.

But the relationship between Lucid Motors and Saudi Arabia goes further back than this recent agreement. Lucid was founded in 2007 as Atieva, a company that was more interested in supplying the budding EV market rather than manufacturing cars itself. It pivoted to the mission and brand of Lucid Motors in 2016, but had trouble raising funds. The company almost died before being saved by the Saudi Sovereign fund’s $1.3 billion investment in 2018.

Lucid has also gone back on the timing for its Gravity project, its luxury SUV that will also be manufactured in Saudi Arabia. In Q3 2021, Lucid set it was on track to begin production and first deliveries in 2023, but on Monday, the company said it expects production to begin in the first half of 2024.

“I just want to make it a better product; I’m really excited with the way it’s developing,” said Peter Rawlinson, Lucid Motors CEO, during the earnings call.It’s taken a few twists and turns in its development to make it even better than we’d anticipated. So I’m super pumped, and I think it deserves just a little bit longer. We also want to integrate a lot of the learnings of a production from Lucid Air into that program, have that healthy feedback loop of integrating those learnings.”

The company is exploring additional manufacturing sites in China and possibly Europe, said CFO Sherry House during the Q4 2021 earnings call on Monday.

Financial results

Lucid generated Q4 2021 revenues of $26.4 million. The company sold $21.3 million worth of its Lucid Air Dream Edition vehicles during the period, which its earnings notes helpfully explain has up to 1,111 horsepower, depending on trim selection and other options. The lamest, weakest, slowest, most-pokey car from the company has to glide along with a mere 800 horsepower, we hasten to add.

Regardless, delivering 125 cars after building a total of 400 to date may seem minute, but for an EV company, reaching production ramp is a material milestone.

The deliveries were not enough to push Lucid close to breaking even. Indeed, the company remains nearly comedically unprofitable. Revenue costs came to $151.5 million for the fourth quarter, research costs were $163.6 million and SG&A costs came to a staggering $197.0 million. All told, Lucid posted an operating loss of $485.7 million in Q4 2021. Or, in the quarter, for every car Lucid delivered in the final three months of 2021, it lost $3.9 million in operating terms.

Investors expected Lucid to report revenues of $36.74 million in the fourth quarter, per Yahoo Finance. The company’s GAAP earnings per share losses of $0.64 failed to excite the investing public.

In full-year terms, the pace of Lucid’s investment in scale and R&D is even more obvious. In the calendar year, against revenue of $27.1 million, Lucid posted an operating loss of $1.53 billion, and a GAAP net loss of $4.75 billion.

You might look at a company with $2.58 billion in negative operating cash flow for a year and say, hey, that’s a lot. But Lucid closed out 2021 with cash and equivalents worth $6.26 billion, so it remains utterly stuffed-full of cash. The company can self fund for some time, even if it fails to cover more of its expenses with gross profit in time. Lucid does carry around $2 billion in long-term debt, it’s worth stating at this juncture.

Looking ahead, investors expect the company’s revenue to scale to $2.01 billion in the current year, once again per Yahoo Finance. Is that number possible? Well, with 125 cars delivered in Q4 2021 and $21.3 million worth of revenue from those sales, Lucid had an ASP of $170,000 in the quarter. If it manages to build 13,000 cars, the mid-point of its guidance, sells them all and holds to its Q4 ASP, then the company would see $2.22 billion in 2022 revenues. That’s the bull case.

Bears might note that the company’s ASP should decline with scale, and that the company won’t sell every car is builds this year, but, hey, a battery that is charged to the midpoint is half-full, right, not half-empty?

More TechCrunch

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

19 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

21 hours ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise

X, formerly Twitter, turned TweetDeck into X Pro and pushed it behind a paywall. But there is a new column-based social media tool in town, and it’s from Instagram Threads.…

Meta Threads is testing pinned columns on the web, similar to the old TweetDeck

As part of 2024’s Accessibility Awareness Day, Google is showing off some updates to Android that should be useful to folks with mobility or vision impairments. Project Gameface allows gamers…

Google expands hands-free and eyes-free interfaces on Android