Luxury electric vehicle maker Lucid Group, Inc. LCID after market close on Monday reported first-quarter revenue that trailed expectations and also lowered its 2023 production forecast.
Tesla, Inc. TSLA CEO Elon Musk commented on the performance to reiterate his warning about the tough life of a startup.
What Happened: One of Musk's followers tweeted that Lucid lost $554,429.59 per car it delivered in the first quarter. The New York, California-based company reported a net loss of $779.528 million for the first quarter, wider than the year-ago loss of $81.29 million. The company also confirmed the previously reported first-quarter deliveries number of 1,406.
Responding to the tweet, Musk said, "Prototypes are easy, production is hard, and achieving positive cash flow is excruciating,"
Commenting on the result, Future Fund's Gary Black said, the more cars Lucid sells, the more money it loses. Delving into the numbers, he noted that Lucid's average selling price was $106,300 per EV sold, and the cost of goods sold was $356,000 per EV sold and the gross profit per EV sold was a negative $249,700.
The quarter-end cash position was at $3.4 billion, suggesting that it depleted $1 billion in cash during the quarter, Black noted. The company also said it has liquidity to keep operations going through 2024.
See Also: Best Electric Vehicle Stocks
Why It's Important: Musk issued the same warning earlier. In May 2021, when a few smartphone manufacturers were making a beeline to the EV industry, he said the same.
As early as last month, when Twitter users discussed the ability of startups such as Lucid and Rivian Automotive, Inc. RIVN to survive, Musk said, "Reaching volume production & achieving positive cash flow is insanely hard."
He warned of a direr consequence in June 2022. The billionaire tweeted that Tesla and Ford Motor Co. F are the only automakers that have averted bankruptcy. "Unless something changes significantly with Rivian and Lucid, they will both go bankrupt," he had said.
In after-hours trading on Monday, Lucid shares plunged 8.69% to $7.04, according to Benzinga Pro data.
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