Lucid grapples with early ‘manufacturing hell’

“There is not any doubt Lucid has an important product and appears to have wholesome demand, with reservations growing from 17,000 in November 2021 to 25,000 on the finish of February,” stated Josh Shastal, director of car forecasting for North America at AutoForecast Options. “The problem is determining find out how to navigate the availability chain and manufacturing points they’re already experiencing as they ramp up manufacturing.”

Lucid CEO Peter Rawlinson delivered the blended information throughout a fourth-quarter earnings name final week.

On one hand, provide chain issues as mundane as carpet and glass have been slowing down manufacturing. On the opposite, the Saudi manufacturing unit is predicted to spice up worldwide gross sales with capability of 150,000 autos by 2025.

“Like many producers, our manufacturing has been — and certainly continues to be — impacted by provide chain challenges,” Rawlinson stated. “We might have chosen to construct sooner, be we elected to not sacrifice high quality.”

Lucid, which has assembled solely 400 vehicles since manufacturing started in September, cut its 2022 production forecast to a range of between 12,000 and 14,000 vehicles. It is earlier estimate for the complete 12 months had been 20,000.

Lucid’s inventory worth fell to $22.63 on the shut on Thursday, March 3, for a 22 p.c loss in contrast with the closing worth of $28.98 on Monday, Feb. 28, earlier than fourth-quarter earnings have been launched. The corporate reported a internet lack of greater than $1 billion within the fourth quarter and $4.7 billion for the 12 months. However Lucid additionally stated it had greater than $6 billion money available to fund its progress plan.

That money will come in useful, Shastal stated. “Even their new decrease manufacturing forecast appears too optimistic, given the present state of the business,” Shastal stated. “The excellent news is that they have loads of money available, which can give them ample time to make the mandatory modifications of their provide chain.”